A disconnect is emerging between younger generations expecting to inherit, and parents balancing their own retirement lifestyle and needs, according to new research from the retirement specialist Standard Life.
In an increasingly uncertain world, with many younger people facing high housing costs and ongoing cost of living pressures, nearly one in four (23%) Gen Z (born between 1997 and 2012) say they are not prioritising retirement saving because they expect to inherit money or property. This view is also common among millennials (born between 1981 and 1996), with one in five (20%) of this generation saying the same.
However, inheritance is never guaranteed. Separate Standard Life research highlights that parents are increasingly reassessing what they plan to pass on, with one in seven parents (15%) planning to prioritise enjoying their money and living for today over leaving an inheritance for their children or family.
This comes as upcoming policy changes continue to influence retirement spending decisions. From April 2027, most unused pension funds and pension death benefits will be brought within the value of a person’s estate for inheritance tax purposes. Against this backdrop, nearly three in 10 parents (29%) say the changes will affect how they plan to use their pension in retirement. One in 10 (10%) say they are now more likely to spend their pension savings during retirement rather than leave them behind, while an additional one in five (22%) say they are now more likely to gift money during their lifetime instead.
Mike Ambery, Retirement Savings Director at Standard Life said: “Inheritance can play an important role in family finances, but it is risky for younger people to build their retirement plans around money or property they may never receive. At a time when many are dealing with higher living costs and financial pressures, it’s understandable that some may look to inheritance as part of the picture – but it’s far from guaranteed.
“With people living longer and later-life costs rising, many parents may understandably want or need to use more of their savings during retirement. As highlighted by our research, recent policy changes are also prompting some to reassess how they use their pension savings. With this in mind, inheritance should be seen as a possible bonus, rather than a substitute for building your own retirement pot.
“For Gen Z and millennials, the best approach to saving for retirement is to focus on what is in their control. Starting to contribute to a pension as early as possible, making the most of workplace pension schemes and increasing payments when your salary rises can all help savings benefit from long-term compound investment growth.”
Mike Ambery shares his key tips for maximising your pension savings and building your own financial future:
- Treat inheritance as a bonus, not the plan – “Money or property passed down can make a real difference to people’s finances, but it’s never guaranteed. Circumstances can change, parents may need to use more of their savings in retirement, and later-life costs can be unpredictable. Focusing on your own pension savings gives you greater control over your future and reduces the risk of being caught short later”
- Make the most of employer contributions – “Workplace pensions can be a powerful way to build long-term savings, especially where an employer offers to increase their contributions when you increase yours. If this is available and affordable for you, making the most of it can help grow your pension faster without relying only on your own payments.”
- Regularly check in on what you’re already saving – “It’s harder to plan for the future if you don’t know where you stand today. Checking your pension balance, projected retirement income and contribution levels can help you understand whether you’re on track. If you’ve had several jobs, you may also have old pension pots that should be traced so you have a full overview.”
- Use key money moments to increase contributions – “Pay rises, bonuses and finishing major expenses can all create opportunities to review what you pay into a pension. You don’t need to make dramatic changes but gradually increasing contributions when your finances allow can help build momentum and strengthen your pot over time.”
- Review where your pension is invested – “Your pension is designed to grow over the long term, so the way it’s invested also matters. The value can rise and fall but short-term market movements should be seen in the context of a longer savings journey. Checking whether your investments still match your goals, age and attitude to risk can help keep your pension working in the right way for you.”
- Make use of pension tax relief – “Pension saving comes with valuable tax advantages, effectively giving your contributions a government top-up. For a basic-rate taxpayer, every £80 contributed from take-home pay is boosted to £100 in a pension. Higher-rate taxpayers can benefit even more, with additional relief available either through a tax return or via payroll, particularly where salary sacrifice is used.
“Over time, this upfront boost, combined with long-term investment growth, can make a meaningful difference to your retirement savings. It’s worth checking how your pension is set up, to ensure you’re making the most of all the relief available.”
1 – Standard Life Retirement Voice research conducted by Ipsos on behalf of Standard Life in June 2025. In total, 6,000 participants took part in the online survey.
2 – Opinium surveyed 2,000 UK adults nationwide between 11th – 14th November. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population.
