The UK faces a tapestry of interconnected challenges around retirement security. Recent reforms suggest a certain resilience. However, there are also vulnerabilities that threaten the prospects of future generations.
The challenge of retirement security is global and complex. For many of us, visions of a secure and fulfilling retirement – one filled with travel, leisure, and time with loved ones – is increasingly clouded by financial uncertainty.
Many of the fears we share for our prosperity in retirement are captured in the findings of the 2025 Natixis Global Retirement Index (GRI). As the analysis of the report highlights, retirement planning begins with a simple question: will I have enough? For 40 per cent of individual investors surveyed globally, the answer remains far from certain.
Despite efforts to save, unpredictable factors like job loss, health issues, and AI-driven workforce changes make it difficult to forecast how long one will work or live. Outside a few specialised annuity products, there are no guarantees on market returns or interest rates, making it hard to gauge what retirement income will really look like in the future.
The big picture
In 2025, investors have the immediate concern presented by inflation, which 38 per cent globally say is killing their retirement dreams1. Rising prices may have slowed in many regions, but the cumulative effects of a prolonged bout of inflation has hit household budgets hard. Faced with higher costs for everyday essentials, investors worldwide say they are saving less as a result.
As individuals try to piece together a reliable income stream, government benefits are a critical part of the puzzle. But with 33 per cent of investors worried about potential cuts, confidence in public pension systems is waning1. Ageing populations and mounting public debt are straining national retirement programs, and even countries with automatic inflation-linked adjustments are seeing gaps between rising costs and benefit increases.
Fit for the future
The size and scale of the complexity facing providers of retirement security in the UK shouldn’t be underestimated. The state pension currently plays an outsized role, providing the majority of retirement income for most pensioners and the entirety of it for 13 per cent. Meanwhile, ongoing debates swirl around the future of the so-called ‘triple lock’, state pension age (currently 66 and set to rise), and whether the system can remain sustainable and fair in an ageing society dealing with stretched public finances3,4,5.
Recent reforms aim to bolster system resilience by consolidating pension funds, creating ‘mega funds’, and exploring the inclusion of more illiquid, higher-returning private assets such as infrastructure and private equity in pension portfolios. New regulations will require more explicit risk assessments and a balancing act between intergenerational equity and fiscal sustainability3,4.
When we look at the Leeds Reforms announced by the chancellor, Rachel Reeves, in her Mansion House speech during the summer, it’s clear there’s never been more thought provoking change going on within pensions and investment provision for retirement than there is today. More can done, but we’re seeing retirement security increasingly becoming more of a shared responsibility across individuals, governments, financial service providers and employers.
Retirement in a changing landscape
We’re in a world where we’re moving from defined benefit to defined contribution, the state benefit retirement age is getting higher, and where there are questions around the sustainability of the triple lock – and even the means testing of state pensions. The undeniable outcome is that the responsibility for retirement provision rests with the individual more so than it ever has done, and not with a paternalistic employer or indeed a paternalistic government.
Much can be achieved by early engagement, discussing retirement with a financial adviser or wealth manager – covering everything from boosting employer and personal contributions to consolidating pension pots and tax planning. But there’s no getting away from the industry appetite to including private assets in the mix, with various new offerings allowing DC savers access to such markets3.
As we shift from DB to DC provision, it’s having an important impact on asset allocation and a demand for more diverse portfolios that include private assets. Liquidity is a challenge, but the industry is already delivering solutions for this. Provided private assets are structured in portfolios in the right way, it’s likely to be an important part of solution for financial security in retirement for years to come.
The revived Pensions Commission, unions, industry, and consumer advocates all agree that it will take consensus and innovation to build a system ‘fit for the future’ 1,3. Ultimately, the goal is not only to shore up finances but to provide the next generation of retirees with the means and opportunity to enjoy healthy, fulfilled later lives.
For individuals, that means proactive planning and informed dialogue with professional advisers. For institutions, it means smarter structures and better products. Collectively, the ambition is to make retirement work for all – environmentally, financially, and socially1,3,6.