The latest Family Resources Survey (2024–25) and Pensioners’ Incomes data paint a mixed picture of retirement in the UK, with progress in pension saving and rising incomes tempered by persistent inequalities. The figures highlight growing divides in who is able to save, invest and build long-term financial security for later life.
From the challenges facing self-employed workers and carers to the uneven incomes seen across different household types and regions, the data suggests that financial resilience in retirement remains far from equal. It also underlines the continued importance of the State Pension, particularly for those with fewer private sources of income.
Industry professionals are reacting to the latest news below:
Marianna Hunt, Personal Finance Expert at Fidelity International, comments:
“The latest Family Resources Survey highlights a growing divide in how people are preparing for retirement. Automatic enrolment has brought millions into pension saving, but there are still significant gaps. One of the most concerning is among the self-employed, where around 80% are not saving consistently for later life.
“That matters because the State Pension on its own is unlikely to provide the kind of retirement most people hope for. The data also points to a broader challenge: while many households are managing to put some money aside, far fewer are building meaningful investments that can grow over time and support them in later life.
“It’s telling that only around 8% of adults hold stocks and shares, compared to 13% who hold Premium Bonds. This suggests many people are understandably prioritising security but may be missing out on the long-term growth that investing can offer.
“For the self-employed, the barriers are very real. Irregular income and the lack of employer contributions can make it much harder to commit to regular pension saving. Without more targeted support, there’s a risk that many could face a more financially uncertain retirement.
“There are also pressures on those juggling work and caring responsibilities. Nearly one in five women aged 55 to 64 are carers, and only 28% of female carers work full-time. Balancing these demands can make it significantly harder for these women to prioritise saving for the future, even when they know how important it is.
“Overall, the figures are a reminder that while progress has been made, many people are still finding it difficult to build the financial security they’ll need for later life.”
Pensioners’ Incomes: financial years ending 1995 to 2025
“Looking at the DWP’s Pensioners’ Incomes data alongside this, a more complete picture emerges. The latest figures show pensioner incomes (after housing costs)* are at a record high, but beneath the headline growth there are some important nuances. While average weekly incomes have risen significantly over the long term, much of this reflects increases in the State Pension, which now makes up as much as 58% of income for single pensioners. This underlines how central it remains to supporting retirees’ finances.
“However, the averages mask big inequalities. Pensioner couples are in a far stronger position, with average incomes of £650 a week – almost double that of single pensioners. Life events such as bereavement or divorce can have a deep financial impact, particularly for women, who tend to have lower incomes in retirement and rely more on benefits than men.
“The data also challenges the idea of a traditional retirement. A significant proportion of pensioners are still working, with earnings making up 17% of income for couples and 7% for single pensioners.
“For some this will be a personal choice, but for others it may be because they simple cannot afford to retire.
“There are clear regional inequalities: pensioner couples in London and the South East have higher incomes than the UK average, while those in regions such as the East and West Midlands lag behind.
“Overall, the figures paint a picture of a retirement landscape that is improving but remains deeply uneven. They reinforce the importance of building multiple sources of income beyond the State Pension and planning for life’s uncertainties.”
Maurice Titley, Commercial Director Data & Dashboards at Lumera, commented:
“Today’s figures show a modest but welcome uplift in pensioner incomes, with a 3.6% increase over the past year offering some reassurance amid ongoing cost pressures.
“It is encouraging to see progress in overall income levels, and reforms such as targeted support, guided retirement and the MoneyHelper Pensions Dashboard should help to build on this trend, as people make more informed decisions about their financial futures.
“That said, the ongoing trend of a growing reliance on benefit income – including the state pension – now accounting for almost half of pensioners’ total income, is a clear signal that more needs to be done to strengthen private provision. Encouraging higher contributions, particularly earlier in working life, will be critical to improving long-term outcomes, as will other innovations in pension provision such as collective defined contribution (CDC) schemes. At the same time, schemes must ensure their technology and administration capabilities are robust enough to support members effectively as engagement with pensions continues to evolve.”
Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, said:
“In 2026, the State Pension remains one of the most trusted and valued parts of the UK’s social security system. People from all walks of life depend on it and they continue to see it as a bedrock of financial security for the future.
“At a time when many people in their early 60s are already living in poverty, it is crucial that any future changes to the State Pension do not deepen inequality or hardship. Today’s figures underline this reality: the State Pension still makes up a significant share of income for those in the bottom fifth of the income distribution, with 79% of couples and 88% of single people relying on it as their largest source of income. By contrast, it represents only a small fraction of income for the highest earners.
“At the same time, the Government faces genuine concerns about the long term affordability of the State Pension as people live longer. The upcoming rise in the State Pension age in April is intended to help address this. However, experience shows the risks: the last time the State Pension age increased, poverty rates for 65 year olds doubled**, illustrating the very real consequences of policy decisions that do not account for unequal health, employment and financial realities.
“That is why it is more important than ever for policymakers to commit to a State Pension system that is fair, financially sustainable and capable of protecting future generations from poverty in later life. We need a solution that balances fiscal responsibility with the fundamental principle that no one should face hardship as they approach or enter retirement.”
Ian Futcher, financial planner at Quilter:
The Financial Resources Survey
“The Financial Resources Survey highlights how little financial headroom many households have. Almost half of families hold £1,500 or less in savings, including 18% with no savings and another 9% with under £100. These numbers leave families highly exposed to routine financial shocks, so building resilience has to start with small, regular contributions. Automating a modest transfer into a separate pot each month as soon as you get paid creates a level of consistency that is difficult to achieve when budgets feel unpredictable.
“Unsurprisingly, investment participation also remains weak. Only 8% of adults hold stocks or shares, and engagement rises meaningfully only in older age groups. That does not sit comfortably with the current policy direction. The government wants households to engage more confidently with investing and direct a greater share of savings towards long‑term assets. The reduction in the cash ISA limit from April 2027 is intended to encourage that shift, but without a stronger foundation in financial understanding many people may simply save less rather than redirect money into investments. Clearer guidance on how to build an emergency buffer, how ISAs and pensions work, and how small contributions compound over time would help people make better long‑term decisions and build up their financial resilience rather than making wholesale changes to ISA policy.
“The survey shows in black and white how much care responsibilities add even more pressure to finances. Eight in every 100 people provide informal care, with the highest rates among those aged 55 to 64. These years would often be at a time when savings and pension contributions are building the most, yet caring duties frequently reduce working hours and interrupt contributions. For those, with significant caring responsibilities when circumstances allow, rebuilding contributions and using available allowances can help restore momentum so people can continue to build a retirement that they aspire to.”
Pensioners’ Income Series
“The latest Pensioners’ Incomes figures show that incomes have been broadly stable despite skyrocketing inflation over the period. Average weekly income after housing costs sits at £455, compared with £443 in FYE 2022, which suggests that income growth in real terms has been subdued, which given the high levels of inflation we have suffered is cause for worry as more income gets swallowed by everyday expenses. With energy prices set to increase in the near term this could put a significant strain on pensioner’s finances.
“The figures show that auto enrolment has genuinely reshaped behaviour among employees, pushing workplace participation to around 80% from nearer 60% a decade ago. It has become the backbone of retirement saving for millions of workers, and other data has already shown just how many extra people are now in schemes as a result. While it has done an excellent job, it needs to evolve to improve how much people are putting away.
“While auto-enrolment has done a decent job of getting people saving the self employed have been left out of the picture. Only about one in five are contributing to a pension, and the gap is widest at the point when saving matters most. While almost 9 in 10 employed 45–54‑year‑olds are in a pension, only around a quarter of self‑employed people of the same age are saving in this way. Previous datasets have already painted a bleak picture for this group, and the latest FRS suggests the structural gap is still very much there. Without the nudge of auto enrolment or employer contributions, the onus is entirely on the individual. In practice, that means keeping contributions as simple and predictable as possible: setting up a standing order into a personal pension, increasing contributions in good months rather than stopping in bad ones, and making full use of tax relief so each pound of contribution works harder.
“The gender gap is clear in the breakdown of income sources. For single pensioners, benefit income accounts for 52% of total gross income for men and 62% for women. Occupational pension income contributes 26% for single men and 23% for single women, while earnings account for 9% of men’s income and 6% of women’s. These differences reflect lifetime labour patterns, which continue to be entrenched and result in persistently lower incomes for many women in retirement. For any couples these statistics should be a wake up call to ensure that pension contributions are maintained during periods out of work.
“Pensioners under 75 have average weekly incomes of £502, compared with £417 for those aged 75 or above. Benefit income makes up 41% of total gross income for the younger group but rises to 54% among older pensioners. The shift reflects the fact that older retirees have fewer opportunities to supplement their income through work and are more reliant on the State Pension and fixed private pension arrangements. As we live longer these differences are only set to get starker. For younger generations the message needs to be to plan for a retirement that could span decades and for part of it to potentially be in ill health requiring care. Starting as early as possible and giving your retirement pot plenty of time to compound is usually the best course of action.”
Damon Hopkins, Head of DC Workplace Savings at leading independent financial services consultancy Broadstone, commented:
“These figures show that pensioner incomes are starting to grow after a few years of plateauing with average incomes rising by over £800 a year. However, the composition of income is arguably more important than the headline numbers with a large proportion of pensioner income – particularly for single pensioners – still coming from the State Pension and other benefits.
“Indeed, the increase in incomes seen in the latest figures is largely likely to be down to the impact of the Triple Lock which delivered a significant 8.5% increase to the State Pension in FYE 2025.
“It further underlines how important workplace pension saving will be for the majority of workers coming through the current system. The State Pension provides a foundation, but on its own it is unlikely to deliver a comfortable retirement income.
“The data also highlights a clear divide between single pensioners and pensioner couples. Single pensioners remain heavily reliant on State Pension and benefit income, whereas pensioner couples are more likely to have occupational and private pension income. This is important because it highlights how those with private pension savings are less reliant on future increases in the State Pension to reach an adequate standard of living in retirement.”
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