Gen Z could lose £69,900 in state pension as retirement costs soar – Rathbones

Gen Z could lose up to £69,900 in state pension income with the state pension age rising to 68, according to new analysis by Rathbones. 

Rathbones estimated that someone aged 25 today could miss out on two years of state pension payments, worth around £69,900, while a 45 year old could forgo about £42,700, if the state pension age reaches 68 instead of staying at 66. 

The figures are based on the new full state pension of £12,548 a year, uprated by 2.5% a year under the triple lock system.

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. 

“Many young adults we’ve come across ask for retirement modelling for worst case scenario of no state pension.

“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.”

Wood added: “That means the onus is increasingly falling on individuals to build a robust retirement pot themselves.”

Analysis from Rathbones showed that a single person retiring today at 65 may need about £796,000 in savings to fund a comfortable retirement, rising to £913,000 for a couple, assuming the state pension is paid throughout retirement.