Pensions in the age of uncertainty - What Gen Z really thinks

Nearly half of Gen Z believe the state pension won't exist by the time they retire[1]. For a generation shaped by economic precarity - from the 2008 crash to Covid and the cost-of-living crisis - pensions feel more like a relic than a reliable future plan. And yet, this is the first generation to be auto-enrolled into a savings system they don't fully understand - or believe in.

Pensions were designed as a long-term safety net - but for Gen Z, the ground beneath them keeps shifting. With housing costs skyrocketing and real wages falling, saving for retirement can feel like a luxury. They're digital natives, but pension systems still feel paper-based and opaque. And with 6.7 million young people now auto enrolled, ignoring their attitudes is no longer viable. If providers and policymakers want to future-proof the system, they must first understand why the next generation is stepping back - not leaning in.

Young people say they care about their financial future - but the data shows a troubling gap between knowledge and action. While 60% of Gen Z say they have "a good understanding of pensions",[2] only 10% pass basic pension literacy tests[3]. 29% of 18–25-year-olds have never actively contributed beyond what's auto-enrolled[4], and nearly half admit they don't know what kind of pension they have[5]. The issue isn't apathy - it's a lack of confidence in a system that confuses more than it clarifies.

Gen Z faces the sharp end of the affordability crisis. Saving for 2075 isn't seen as a priority when today's financial pressures - rent, bills, rising costs and debt - dominate. Over 50% of young people say immediate financial pressures prevent them from contributing more to pensions[6]. And the structure doesn't help: freelancers and gig workers often fall outside traditional schemes, and auto-enrolment contribution rates (currently 8%) are far below the 12–15% needed for a secure retirement[7]. It's not that they don't care - many just can't contribute more.

Unlike previous generations, Gen Z doesn't see pensions as just numbers. 88% of under-25s want their pensions invested in line with their values[8], particularly around climate change and human rights. Many would accept lower returns in exchange for ethical investing[9]. Yet, most don't know where their money is going - and want providers to be far more transparent. This isn't a fringe concern - it's a generational expectation.

Nearly half of Gen Z believe the state pension won't exist when they retire[10] - and 47% say they expect to keep working into old age[11]. Trust in institutions is low, and pensions are perceived as outdated and inflexible. This generation has seen safety nets eroded and crises multiply. Their scepticism isn't baseless - it's built on experience. Unless the system modernises – through mobile platforms and flexible contribution models, for example - it risks alienating its youngest members completely.

Gen Z isn't turning away from pensions out of disinterest - they're turning away from a system that feels misaligned with how they live. If providers want to rebuild trust, they need to stop relying on legacy structures. That means clearer education, ethical transparency, more inclusive contributions for non-traditional workers, and a cultural shift in how we talk about retirement. Engagement won't come through fear or apathy - it'll come through relevance.

Archie Pritchett is a member of Gen Z and an operations analyst at PensionPay