Why 66% of UK Adults Expect the State Pension to Carry Part of Retirement

Hargreaves Lansdown's retirement analysis shows 66% of people say they will rely on the state pension to some extent in retirement. The reliance is uneven: 9% expect to be totally dependent on it, and a further 19% expect to rely heavily on the benefit to meet their needs.

The full new state pension is £241.30 a week. Helen Morrissey, head of retirement analysis at the firm, says that is enough for many people to cover essentials but nowhere near enough for most to maintain the lifestyle they had while working.

The state pension age is also rising. It is expected to reach 67 in 2028 and then start moving to 68 between 2044 and 2046, though an ongoing review could bring that timing forward.

HL's work with Oxford Economics found 92% of people can meet essential retirement needs using the state pension plus their pension savings. Without the state pension, that share falls to around 42%. Auto-enrolment has increased workplace pension participation, which HL expects to reduce total or heavy reliance over time, but the report argues many people will still need to boost contributions to fund more than the basics.

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Where the State Pension Does the Heavy Lifting

The survey records expectations rather than actual retirement outcomes, but it points to how much weight the state pension carries in the UK's retirement income system.

The difference between essential cover and lifestyle spending

The 92% and 42% figures are the clearest indicator of that weight. With state pension plus private savings, almost everyone can fund essentials. Remove the state pension and fewer than half can. That shows the state pension is doing most of the heavy lifting for minimum living standards, not that private saving is unnecessary. HL's conclusion is that households who want spending beyond essentials, or the flexibility to stop work earlier, need to build more private provision.

Age and contribution timing shape the shortfall

Because state pension age is set to reach 67 in 2028 and 68 between 2044 and 2046, the value of the benefit depends partly on when people can access it. A change in the state pension age review would bring the later increase nearer, reducing the number of years some households can rely on the payment. The example HL gives is illustrative: a 22-year-old earning £25,000 and contributing at auto-enrolment minimums could have a pension worth £477,500 by age 68. Raising contributions to 10% a year from age 32 lifts that to about £550,000. The gain is material, but it depends on continued earnings, investment returns and no early withdrawal.

What a Small Pension Contribution Increase Can Add

For households, the survey's practical message is to treat the state pension as a floor, not the full plan. Specific steps from the numbers:

  • Budget against the real state pension level: £241.30 a week is roughly £12,550 a year before tax, so compare that with your current take-home spending rather than your working salary.
  • Check your state pension age, because it is scheduled to rise to 67 in 2028 and toward 68 between 2044 and 2046, and a review could bring the later increase forward.
  • Confirm your workplace pension is active and see what you currently contribute. HL notes auto-enrolment has lifted participation, but the minimum contribution may not be enough for your retirement plans.
  • Use HL's example as a rule-of-thumb test: a 22-year-old earning £25,000 at auto-enrolment minimums could reach around £477,500 by 68, while increasing contributions to 10% a year at age 32 could lift that to about £550,000. Model the extra contribution at your next pay rise.