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Generation Z could lose out on up to £69,900 in state pension income over the course of retirement as the state pension age rises to 68, according to new analysis by Rathbones, one of the UK’s leading wealth and asset management firms.
The state pension age is currently being increased from 66 to 67 between April 2026 and April 2028, with a further rise to 68 scheduled between 2044 and 2046. However, an ongoing government review could see these changes brought forward.
Rathbones estimates that for someone aged 25 today, this could mean missing out on up to two full years of state pension payments, worth around £69,900, while a 45‑year‑old could forgo approximately £42,700, compared with the state pension age remaining at 66.
The analysis is based on the new full state pension of £12,548 a year, uprated by 2.5% annually under the triple lock, which increases payments by the highest of inflation, average earnings growth or 2.5%.
Ed Wood, Financial Planning Director at Rathbones, says: “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. That means the onus is increasingly falling on individuals to build a robust retirement pot themselves.
Rising cost of a comfortable retirement
Against this backdrop, Rathbones’ analysis shows how much people at different ages may need to save to achieve a comfortable retirement, using the Pensions UK Retirement Living Standards as a benchmark and applying the widely used 4% drawdown rule.
Rathbones estimates that a single person retiring today at age 65 may need around £796,000 in savings to fund a comfortable retirement, rising to £913,000 for a couple, assuming the state pension is paid throughout retirement.
If the state pension is excluded, the sums required increase sharply. A single person would need around £1.1 million, while a couple would require £1.52 million to sustain a comfortable lifestyle.
These figures do not factor in additional potential costs such as care, rent or mortgage payments.
The challenge grows sharply for younger savers
Building on Rathbones’ earlier analysis showing that Generation Z may need more than £3 million to retire comfortably, this updated modelling shows how state pension provision and drawdown assumptions affect the sums required - and why younger savers continue to face the toughest challenge.
Factoring in the state pension and applying the 4% drawdown rule, a 25‑year‑old today retiring at 65 would need a pot of around £1.68 million as a single person, or £1.86 million as a couple.
These estimates assume 40 years of inflation‑linked growth at 2% before retirement, with the state pension uprated by 2.5% a year under the triple lock — which lifts payments by the highest of inflation, average earnings growth or 2.5%.
The analysis also assumes a state pension age of 68 for those aged 45 in line with current legislation and the ongoing review.
Without any state pension provision, the sums required rise sharply: to £2.42 million for a single person and £3.35 million for a couple, based solely on the 4% rule.
Across age groups, the amount needed for a comfortable retirement steadily declines as retirement approaches - from around £1.54 million for a 30‑year‑old to £885,000 for someone aged 60, assuming state pension provision.
Rebecca Williams, a Financial Planning Lead at Rathbones, says: “People often ask us if there’s a single ‘right’ number to aim for when saving for retirement. There isn’t, but age matters enormously. Inflation quietly erodes even large sums over time, and for younger generations that challenge is compounded by high housing costs, student debt and the cost of living - making it harder to save early, when every pound has the greatest impact.
“Starting early, saving consistently and making the most of workplace pensions and employer contributions can make a powerful difference over time.”
