Skip to Content

Understanding the pension savings gap

1 in 3 children born today have a good chance to live to 100.

We’re fortunate to be living longer than previous generations. We get more time to spend doing the things we care about, with the people we care about. What could be better?

But there’s a problem: the employment, learning and savings structures in place haven’t been built around the reality of our longer lives. This can leave people with less than they need to achieve the retirement they want, when they want it.

It’s this potential shortfall that we call the pension savings gap.

Thinking differently about saving, work and retirement

Through our family of brands and in-house think tank, Phoenix Insights, we're campaigning to increase awareness of the pension savings gap and what is driving it, and we will motivate people and policymakers to act. We are using our scale and position to reach millions of people to encourage them to start thinking and talking about retirement.

We know that for some people pensions are difficult to relate to or engage with, and this is driving the savings gap. So, through Phoenix Insights we are seeking to improve our understanding of people’s knowledge of pensions, what their expectations are for retirement, and how prepared they are. We are using our research to provide ongoing evidence to support key policy changes.


Gettyimages 1288610566 Rendition Web


Measuring the gap

Many people working today face a huge challenge when it comes to planning and saving for their financial security in retirement.

Using our Phoenix Insights Longer Lives Index data – a survey of 16,500 people aged 25 and over who aren't yet retired - we explored the adequacy and achievability of people’s retirement income.

A gap that's unevenly spread

Life R2 8575 HR Rendition Web

Women’s pension incomes are on average 40% less than men’s

The gender pay gap and impact of women’s life events - such as motherhood or caring for elderly relatives - don’t only affect their finances today. This is because lower earnings result in lower pension contributions over time.

Gettyimages 1183551230 Rendition Web

Pension participation among ethnic minorities is lower than average

We want to work with industry leaders to shape how best to engage with ethnic minority groups. Together, we can help identify and address the causes of the retirement funding gap in many communities.

Driving system-wide change


Need for change

We think we need to reshape the systems that support us, to enable people to live better longer lives. And our research shows there are key areas that could make a big difference.

Engaging With Financial Future

Improving how we engage people in their future finances

This should include widening auto-enrolment coverage; enhanced focus on financial literacy for people of all ages; and greater access to free financial guidance.


Encouraging saving through more flexible provisions

Additional defaults should be explored, such as auto-escalation of pension contributions when salary increases.

Vulnerable Customer Responding To Vulnerability

Creating a safety net of support for those unable to work longer or save more

We need to create better opportunities for good work and ensure that there is a safety net such as the state pension for those who most need it.

Advocating for better longer lives

Family Sitting On A Couch

There are several policy measures we believe would help support businesses and individuals including:

  • Widening auto-enrolment coverage by lowering the age and earnings eligibility thresholds.
  • Reviewing the advice and guidance boundary to give more people access to reliable financial support.
  • Legally requiring employers to share details on how contractual changes may impact pension contributions.
  • Revisiting the Carer’s Leave Bill to ensure that unpaid carers can access up to ten days’ statutory paid leave.
Person At Work

Employers are also in a unique and powerful position to tackle these issues.

We have already implemented a range of policies and recommend that employers, where possible, follow our example by:

  • Re-enrolling workers into pension schemes annually, rather than the statutory three years.
  • Ensuring employer pension contributions continue during periods of parental leave.
  • Adopting a minimum of five days’ unpaid leave for those with caring responsibilities, and where possible, five days’ paid carers leave.
  • Ensuring workplace health policies offer explicit and visible support for reproductive conditions such as miscarriage, fertility treatment, for those diagnosed with endometriosis and managing menopause symptoms.
  • Making flexible working the norm from day one, highlighting this across all job roles.
Women Working In A Bakery

How ready are you for retirement?

As we are living longer than previous generations, being prepared for retirement has never been more important. So, we wanted to find out just how ready people are for retirement across the UK.

We polled 2,500 workers aged over 45 across the UK, weighted to nationally representative proportions, to see what differences there are in how people are financially preparing for retirement, and what their expectations are for when they stop working.

Find Out