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Tue, 30 Jun 2026

Tue, 30 Jun 2026 Why Gen Z are planning for life without a state pension

Many younger people do not believe the state pension will exist when they are older
1. Opting out of employer-sponsored pensions: Some Gen Z individuals have chosen not to contribute to their employer's auto-enrolment pension scheme because they feel they need the money now rather than saving for retirement. 2. Prioritizing short-term goals: Many in this age group are focused on immediate financial needs, such as buying a house or traveling, rather than saving for retirement. 3. Taking "mini-retirements": Gen Z is more likely to take regular career breaks, or "grown-up gap years," which can be seen as a form of mini-retirement. Experts warn that this lack of trust in the state pension system could lead to several negative consequences: 1. Increased risk of poverty in retirement: If many Gen Z individuals don't save enough for retirement, they may struggle with financial security in their later years. 2. Widening income inequality: The gap between rich and poor in retirement is likely to increase as those who can afford to save more will have a greater chance of achieving a comfortable retirement. 3. Higher risk of pensioner poverty: With more Gen Z individuals renting rather than owning homes, they may face additional financial challenges in retirement. The article highlights the importance of auto-enrolment pensions, which can provide a safety net for many employees. However, this benefit is not automatic for self-employed individuals and those who opt out due to immediate financial pressures. Ultimately, the article suggests that Gen Z's concerns about their retirement prospects are well-founded, and they may need to take a more proactive approach to planning for their later years.