How retirement expectations differ from Gen Z to Boomers

It’s probably no surprise that visions of retirement vary widely between generations. New research from AJ Bell has revealed to what extent; younger Brits are setting their sights higher when it comes to the income they think they’ll need.

Younger generations are setting bigger goals

Gen Z (aged 18-27) believe they’ll need around £46,000 a year to enjoy a comfortable retirement which is almost twice what Boomers (aged 60-78) consider sufficient at £24,000*. It’s clear that younger people are thinking big about their future lifestyle. But it’s also encouraging that they recognise the need to plan ahead to make those ambitions achievable.

State pensions can make up a decent portion of retirement plans, but confidence in the state pension is much lower among younger generations. Only 20% of 18-34 year-olds say they plan to rely on it, compared to 46% of those aged 35-54.

Instead, younger adults are looking to build their own retirement savings:

• 64% plan to use cash savings
• 34% expect to draw on a workplace pension
• 33% intend to use a stocks and shares ISA

  
For over-55s who haven’t yet retired, the state pension remains the most common expected income source, followed by cash savings (63%), while fewer than a third (29%) expect to rely on a pension scheme

While it’s sensible to hold some cash for short- or medium-term needs, inflation can erode its value over time. Investing your long-term savings offers the best chance of keeping up with inflation and growing the value of your money both in the run up and even through your retirement.

The pension participation gap

Despite positive attitudes towards saving, a significant number of people still haven’t started. Around 21% of Gen Z respondents said they have no pension savings, alongside 15% of Boomers who have not yet retired.

The earlier you start saving, the more time your money has to grow. Even small, regular contributions can make a big difference over the long term, especially when you factor in tax relief and employer contributions.

So how much do you need for a comfortable retirement?

Across all age groups, the average Brit in our sample believes they’ll need around £39,000 a year to feel comfortable in retirement. Once you strip out the current full state pension, that leaves roughly £27,000 a year to come from your own savings and investments.

If you started saving at the age of 25, you’d need to save £373 per month into your pension, together with your employer, to help you achieve an annual retirement income of £27,000 from your pot by age 67. This assumes 3% salary and contribution growth per annum and modest investment growth of 5% a year before charges.

If you left it to the age of 30 to start, total payments would need to rise to £483 each month. At age 40, this would increase to £850 per month, and would be higher still, at £1,200 at age 45. 

Saving these larger sums could be challenging, considering you may have more immediate short-term outgoings to consider, so paying into your pension early increases the likelihood of achieving your desired retirement.

Here’s what you might need to save each month to reach that goal by age 67:

Source: AJ Bell. Assumes 3% yearly growth on salary and contributions, and entering retirement at a state pension age of 67. Figures include employer contributions. Growth of 5% per annum, adjusted for inflation and charges.

*Based on a nationally representative sample of 2,000 adults in the UK, conducted by Opinium on behalf of AJ Bell between 29 August and 2 September 2025.