The retirement ‘expectation gap’ – the gap between when Brits want to retire and when they actually think they will be able to – has widened in the last year, according to new research from Standard Life.
The study revealed rising living costs, pension insecurity and ongoing financial pressures as they key factors pushing expectations further from aspiration.
The 2025 Standard Life Retirement Voice report explores the retirement attitudes of 6,000 people across the UK.
It shows that the average preferred retirement age for people remains at 62 – unchanged on a year ago, and a year later than in 2023, when it was 61.
However, the age at which people actually expect to be able to retire has increased to 67, from 66 in 2024, widening the expectation gap from four to five years.
Rising living costs and uncertainty around the current economic environment are continuing to put pressure on retirement planning and the outlook for the future.
Only three in ten UK adults said they are currently living comfortably.
And despite half (53%) worrying they aren’t saving enough for retirement, only 15% have pension saving as one of their top financial priorities for the year.
Almost half (47%) feel their retirement finances are outside their control.
While the scheduled rise in the state pension age from 66 to 67 between 2026 and 2028 is a possible factor in the shift in expectation to 67, the report also shows that public awareness of the State Pension age is low.
Less than one in five (18%) respondents were able to correctly identify the current state pension age of 66.
Confidence in the state pension is also low.
Less than a third (29%) think the triple lock will still be in place when they reach retirement and only a little over half (51%) think that the state pension will still be available for all by the time they retire, as it is currently.
This growing retirement expectation gap is already shaping people’s outlook on later life, with over a third (38%) of working-age adults expecting to have a worse standard of living in retirement than they do currently.
Meanwhile, confidence in working later in life is limited – just less than half (49%) believe they could do their job, or one like it, by the time they are 70.
Those who are renting face a gap of 6.1 years, compared to 5.2 years for homeowners, and just 2.4 years for outright owners.
For households with an annual income under £30,000, the gap is 6.2 years; it narrows to 5.1 years for those earning £30–50,000, 4.6 years for those earning £50–100,000, and just two years for the highest earners.
Those with no pension savings face a 6.5-year gap, compared with 4.7 years for those with DC pensions, 2.5 years for those with DB pensions and 2.1 years for those with personal pensions.
For those able to do so, even a modest bump in monthly pension contributions can go a long way towards helping people retire when they want to.
For instance, someone who began work on a salary of £25,000 per year and paid the minimum auto-enrolment contributions (5% employee, 3% employer) from the age of 22 could amass a total retirement fund of £201,000 by the age of 67.
However, they could potentially retire on a slightly larger pot of £204,000 at the preferred retirement age of 62 if they increased their monthly contributions by just 2% from the age of 22.
Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said the report is “giving us a sharp picture of how people are feeling about retirement, and where action is most urgently needed.”
She added: “Those facing a gap between their retirement hopes and expectations can take meaningful steps to narrow it with the right support, however advice and guidance plays a crucial role here too – from encouraging people to plan earlier and save more consistently if they can, to helping people find ways to manage financially in the years before the state pension begins.”
