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Younger workers banking on inheritance to plug pension gaps

by Emma Simon
July 8, 2025
generation X
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One in four younger workers are deferring retirement savings, on the hope that an later inheritance will plug the pensions gap.

These findings were in Standard Life’s latest retirement voice report. It found that 24 per cent of Gen Z said they were not currently focused on retirement because they expect to receive money or property in the future. 

The report also found that a similar proportion (23 per cent) of millennials, born between 1981 and 1996, also share this view.

However Standard Life points out that banking on inheritance to support retirement can be a risky bet, particularly given the fact that older generations are living longer and are increasingly needing to fund rising care costs, which can eat into assets that may otherwise be passed to younger generations. 

It adds that the Government’s planned 2027 changes to inheritance tax, which will bring unspent pension pots into the IHT net, could also reduce what’s passed on.

Standard Life managing director for retail direct Dean Butler says: “It’s understandable that younger people may not see retirement as an immediate priority, especially when everyday costs feel more pressing, and they have more immediate financial goals like saving for a house deposit. 

“Many may be banking on future financial support and while it’s true that millennials and Gen Z are set to benefit from a significant wealth transfer from baby boomers over the coming years, inheritance is rarely guaranteed and it could come later in life, or not be as much as expected.

“With so many variables, it makes sense to plan and build your own retirement savings, even if you hope to receive a boost later. 

“Fortunately, there are straightforward and flexible ways to start building a retirement pot over time. By starting early and contributing little and often, people can take advantage of tax efficiency, employer contributions and potential compound investment growth, and help improve their financial security in later life.”

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