Generation Z stands to lose up to nearly £70,000 in state pension income over the course of retirement as the State Pension age rises to 68, according to Rathbones.
The State Pension age is set to increase from 66 to 67 between April 2026 and April 2028, with a further rise to 68 scheduled between 2044 and 2046.
The wealth and asset manager estimates that for someone aged 25 today, this could mean missing out on two full years of state pension payments worth around £69,900, while a 45 year old could forgo around £42,700, compared with the State Pension age remaining at 66.
The analysis is based on the new full State Pension of £12,548 a year, uprated by 2.5% annually.
Ed Wood, financial planning director at Rathbones, said: “The elephant in the room for younger generations is that they are likely to face a less generous state pension system than many retirees enjoy today, pushing the bar much higher for what they need to save themselves.
“With people living longer and public finances under strain, serious questions are being asked about the long‑term affordability of the triple lock – with the Institute for Fiscal Studies warning it could cost up to £40 billion a year by 2050. That means the onus is increasingly falling on individuals to build a robust retirement pot themselves.”
Using the Pensions UK Retirement Living Standards as a benchmark, Rathbones estimates that a single person retiring today at age 65 may need around £796,000 in savings to fund a comfortable retirement, rising to £913,000 for a couple, assuming the State Pension is paid throughout retirement.
If the State Pension is excluded, the amount needed rises sharply. A single person would need around £1.1 million, while a couple would require around £1.52 million to sustain a comfortable retirement.
According to Rathbones, the challenge grows sharply for younger savers, with Generation Z potentially needing more than £3 million to retire comfortably.
Factoring in the State Pension, a 25 year-old today retiring at 65 would need a pot of around £1.68 million as a single person or £1.86 million as a couple. However, without a state pension, a single person would need £2.42 million and a couple would require £3.35 million.
Rebecca Williams, a financial planning lead at Rathbones, said: “People often ask us if there’s a single ‘right’ number to aim for when saving for retirement. There isn’t, but age matters enormously. Inflation quietly erodes even large sums over time, and for younger generations that challenge is compounded by high housing costs, student debt and the cost of living – making it harder to save early, when every pound has the greatest impact.
“Starting early, saving consistently and making the most of workplace pensions and employer contributions can make a powerful difference over time.”
