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, as rising living costs, pension insecurity and ongoing financial pressures push expectation further from aspiration.

The Standard Life Centre for the Future of Retirement today publishes the 2025 Standard Life Retirement Voice report – exploring the retirement attitudes of 6,000 people across the UK. Data from the report 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 – but the age at which people actually expect to be able to retire has increased to 67, rising from 66 in 2024 and widening the Retirement Expectation Gap from four to five years.

Uncertainty and cost of living pressures widening Retirement Expectation Gap

Rising living costs and uncertainty around the current economic environment are continuing to put pressure on retirement planning and people’s outlook for the future. Only three in ten (30%) of UK adults saying 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 – with less than one in five (18%) correctly identifying 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. At the same time, many are forced out of work earlier than planned due to caring responsibilities, health conditions, disabilities, skills gaps and ageism in recruitment – potentially compounding the challenge of the Retirement Expectation Gap. Separate Standard Life research finds that around 437,000 over-50s leave the workforce each year from sectors like manufacturing, clean energy, life sciences and tech – known as the ‘Industrial Strategy’ sectors, which are seen as vital to UK economic growth.

Who is most affected? Variations across region, income and housing status

While the average Retirement Expectation Gap across the UK is five years, it varies widely depending on geography and socio-economic background:

Region: The Retirement Expectation Gap is widest in the North East (5.9 years) and Yorkshire & the Humber (5.3 years), and it is the narrowest in London (3.5 years) – creating a regional difference of 2.4 years. The East of England and the South East both have a Retirement Expectation Gap of 5.3 years, and Scotland and Wales both face a 4.9 year gap. The West Midlands, at 4.7 years, has the second-narrowest gap.

Housing status: 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.
Income: 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 2 years for the highest earners.
Pension type: 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.
Gender: Men face a 4.1 year gap, while women’s is over a year longer at 5.4 years

Narrowing the Retirement Expectation Gap: the importance of planning and boosting contributions

Despite these challenges, Standard Life’s analysis shows that those who engage with retirement planning tend to have a smaller Retirement Expectation Gap. For example, despite being the lowest-income households, those who earn under £30,000 and say they have done ‘a great deal’ of retirement planning, have a gap of just 4.7 years compared to those who have done no planning, where it is more than eight years (8.1) Amongst the highest-income households, financial planning closes the gap from 4.2 years to less than a year (0.9) for those who have planned for their retirement.

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. It’s worth noting that they would need to fund more years of retirement with that pot, including bridging the gap to their State Pension age.

Impact of increasing pension contributions to help close the five-year Retirement Expectation Gap:

Total value of pension pot at retirement*
Minimum contributions of 5% employee and 3% employer, retiring at 67	Contributions of 7% employee and 3% employer, retiring at 62	Contributions of 7% employee and 3% employer, retiring at 67
£201,000	£204,000	£252,000
	+£3,000	+£51,000

*assuming 3.50% salary growth per year, and 5% a year investment growth. Figures account for 2% inflation. Annual Management Charge of 0.75% assumed. The figures are an illustration and are not guaranteed. Earning limits not applied. Pensions can go down as well as up and are not guaranteed.

Standard Life’s Retirement Voice report is a vital barometer of public attitudes, giving us a sharp picture of how people are feeling about retirement, and where action is most urgently needed. The fact that people face a growing gap between their retirement hopes and expectations reflects the financial pressures and uncertainties many households face, and there are some clear variations depending on where you live, your level of income, the amount of pension savings you have, and whether or not you own your own home.

Two decades ago, the independent Pensions Commission helped transform retirement saving by creating auto-enrolment. This has brought millions of people into regular workplace pension saving, but it’s clear that average rates of saving are too low to give most people a decent income in retirement. With the Commission now revived, there is an opportunity to deliver even bolder action – building on the groundwork of auto-enrolment to tackle pension adequacy, in the context of longer working lives and the ongoing State Pension age review, to help people get one step closer to achieving their retirement aspirations.

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.

However it isn’t only the pensions system that needs to adapt. Many people feel unable to continue working into their late 60s and beyond, so careers and workplaces must evolve if longer working lives are to be realistic and sustainable. That means embracing flexibility, bolstering support for carers, and encouraging non-linear career paths that allow people to retrain or step back and re-enter in later life. The growing Retirement Expectation Gap highlights the need for a system that supports flexibility, resilience, and confidence in later life – underpinned by policies, employers and accessible advice that empowers people to achieve the retirement they hope for.