The government disclosed recently that nearly 50% of working-age adults aren’t contributing to private or workplace pensions.
Particularly, self-employed individuals, those with lower incomes, and women seem to be less likely to have their own pension plans. Among these, only four people of Pakistani or Bangladeshi descent have opted into a pension scheme.
The BBC connected with some individuals who lack workplace or private pensions to uncover their reasons. Mohaimon, a 29-year-old, shared, “I’m more focused on getting through each day than worrying about what comes later.”
Originally from Bangladesh, Mohaimon now resides in London, where he continues to work in hospitality—something he’s done throughout his career. While he was contributing to a pension during his retail job at university, he eventually stopped when he realized he couldn’t access his funds until retirement.
He mentioned, “The whole idea of doing well in a job and saving for a pension doesn’t resonate with me. Most of my financial choices are about survival; that’s just how it is.” He believes that even for those with decent pension benefits, the priority is often saving for home deposits, aiming for around £30,000 to £50,000 in savings. “That’s what truly matters,” he stated.
“You need to first cover your daily expenses.”
Saira Amir, a 46-year-old self-employed stylist from Norfolk, expressed similar concerns. With three children aged 21, 20, and 11, Saira struggles to manage her daily expenses, making it difficult to set aside any money for retirement savings.
“Being self-employed in this industry is risky,” she admitted. Hoping to open her own salon, she notes that the hefty costs remain a barrier. As a single mother receiving Universal Credit—government support for working-age people—she finds it insufficient for groceries, daily transportation, and retirement savings.
“In past generations, Pakistani parents relied on their kids for support in retirement,” she observed. “But with my own children, I can’t assume the same because I don’t know how they’ll think about things later.”
State pension
Individuals without a private or workplace pension may find themselves depending on state pensions. Typically, to qualify for a full state pension, one needs to have made national insurance contributions for 35 years. As of the 2025/26 tax year, this would amount to about £230.25 weekly, translating to roughly £11,973 annually.
However, the Pension and Lifetime Savings Association estimates that the minimum income necessary for a basic retirement is about £13,400 per year for one person and around £21,600 for two. For what’s categorized as a “moderate” lifestyle, one needs approximately £31,700 annually, while a “comfortable” retirement requires £43,900 for one and £60,600 for two.
Automatic pension registration
Every employer is mandated to offer workplace pension plans and must automatically enroll eligible employees. This includes anyone earning at least £10,000 a year, typically aged between 22 and the state pension age. Exclusions apply for those under 22 and self-employed individuals.
Workers can choose to opt out if they prefer not to save. Generally, a contribution of 5% is expected on earnings exceeding £6,240 a year, complemented by a 3% employer contribution that goes directly to their pension pot.
This system, which began in 2012, aims to encourage early saving for retirement and reduce reliance on state pensions down the line. It has seen notable success, with relatively few people choosing to opt out. Additionally, individuals contributing to workplace pensions can take advantage of tax relief, which enhances their savings efforts.
“For instance, if you’re a basic rate taxpayer paying 20% in income tax, that means your pension contribution effectively only costs you 80% of its value,” explained Helen Morrisey, head of retirement analysis at Hargreaves Lansdown.
“I wish I could start earlier.”
Victoria Orcena, 38, expressed concerns about those without pensions. “People should recognize that the future isn’t looking bright and they need to act,” she said.
Originally from Argentina and now a British citizen, Victoria runs an AI marketing consulting firm, earning about £50,000 annually. She aims to contribute to her pensions sooner and also save for ISAs.
Helen Morrisey added, “While retirement may seem far off, early contributions significantly build value over time. It’s much tougher to catch up later, so starting soon is really beneficial.”
