Are We Heading for a Retirement Crisis?

Here’s something you might not expect to hear: people retiring in 2050 could actually be worse off than today’s pensioners. That’s the warning from the Department for Work and Pensions, which has just brought back its Pensions Commission to look at how we begin to close the growing gap between what people are saving and what they’re likely to actually need.

From our perspective at Chesterton House, this is less a surprise and more a confirmation of what we’ve been seeing. Many people are still planning for a retirement that may no longer reflect the world we’re actually living in. As lifespans lengthen and more retirees remain active and independent well into their later years, those extra years come with a price tag. “Unretirement” is gaining traction as a concept, but it’s not a one-size-fits-all solution, and for some, it’s not a solution at all.

What the Numbers Are Telling Us

There’s no doubt that auto-enrolment has made a difference – pension participation is up from 55% to 88% in the last decade. But according to the DWP’s latest figures, we’re still far from where we need to be.

Nearly half of working-age adults aren’t contributing to a private pension

Over three million self-employed people aren’t saving for retirement at all

Just one in four low earners in the private sector are building any pension wealth

Women face a 48% gender gap compared to men, with a typical woman receiving just over £100 a week and a man receiving £200 from private pension income

And people from some ethnic communities are significantly less likely to be contributing, with an estimated one in four people of Pakistani or Bangladeshi heritage actively saving

The picture is clear: too many people are drifting towards retirement without sufficient support in place.

What Does This Mean for You?

If you’re in your 40s or 50s, it’s easy to think of retirement as a ‘later’ problem. But the truth is, what you do now will shape the options you have later. It’s not just about saving – it’s about making smart decisions early enough that you still have time to benefit from them.

According to the Pensions and Lifetime Savings Association, the income needed to support a ‘moderate’ retirement lifestyle is now around £31,700 per year for a single person. For a ‘comfortable’ lifestyle, that figure rises to £43,900.

These aren’t extravagant numbers. They’re based on an income needed to sustain the kind of retirement most of us envision – not luxury, but genuine comfort and choice. One that allows you to enjoy your time without worrying about every spending decision.

But without a clear plan in place, many people will fall short.

What You Can Do Now

The good news is that it’s not too late. But the sooner you act, the better your chances of building the future you want.

At Chesterton House, we work with people from all walks of life: employed professionals, business owners, those nearing retirement, and those just starting to think about it. Here’s how we approach it:

• We get clear on what retirement really looks like for you – not just in terms of numbers, but the kind of life you want to live when work becomes optional.
• We check for gaps – Is your current plan realistic? If not, we work out exactly what needs to change.
• We create a plan you’ll actually stick to – One that fits your goals, values, and lifestyle—not someone else’s.
• We help you make the most of what’s available – Think tax relief, employer contributions, carry-forward allowances, and other valuable opportunities.
• We consider the bigger picture – From later-life care to passing on wealth to your family, retirement planning is about more than just pensions.

With the right advice and a plan tailored to you, retirement becomes something to look forward to – not worry about.

Why Waiting Costs More Than You Think

The Pensions Commission isn’t due to report back until 2027. But waiting for the government to decide what to do next could cost you – in missed tax relief, lost investment growth, and fewer choices down the road.

Each year you delay makes reaching your retirement target harder and more expensive. That’s why starting now, however small, is one of the most powerful decisions you can make.

Thinking About Your Own Retirement?

If you’re unsure whether you’re on track, you’re not alone. The best next step is simply to start the conversation.

No jargon. No pressure. Just a chance to get clear on where you are, and what needs to happen next.

Book a complimentary call with one of our Financial Planners today. We’re here to help you build a retirement plan that works – not just on paper, but in real life.

 

 

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FAQs

How do I know if I’m saving enough into my pension?

It all starts with the kind of retirement you want. We’ll help you work out how much income you’ll need and whether your current savings are on track to get you there.

I’m self-employed and haven’t started a pension. Is it too late?

Not at all. You’ve actually got more control over how and when you contribute – and there are generous tax breaks too. The key is to make a start, even if it’s small.

What’s the difference between workplace and private pensions?

Workplace pensions usually come with employer contributions (a valuable boost), while private pensions give you more freedom over investment choices. Many people benefit from having both.

Should I pay off my mortgage or focus on my pension?

It depends on your circumstances – things like interest rates, tax relief, and your broader goals all play a part. Often, a blend of both works best.

How much should I be putting into my pension in my 50s?

There’s no magic number, but in your 50s, ramping up contributions often makes a big difference. The current annual allowance can be up to £60,000, and you may be able to use unused allowances from the past three years.

What happens if I’ve had lots of different jobs?

You’re not alone. Many people end up with multiple small pension pots. These can often be consolidated – but first, we’ll help you check if any have benefits that are worth keeping.

Can pension rules change—and should I worry?

Rules do shift, but the main benefits – like tax relief – have stayed fairly stable. A well-balanced plan that includes ISAs, property or other income sources adds security if things do change.

Can I take money from my pension early?

Most pensions allow access from age 55 (soon to be 57), but it’s not always wise to dip in early. We can help you understand the full picture before making any decisions.