Financial independence out of reach for 6 million in the UK

7 August 2025

• A quarter (25%) of UK adults don’t feel financially independent 
• 35% admit it’s because they are unable to save for retirement 
• Gen Z, people with disabilities and renters are most likely to feel this lack of independence

A quarter (5.7 million) of the UK working age population don’t think they’ll ever be financially independent, according to Scottish Widows' latest Retirement Report (PDF, 3MB).

The most commonly cited indicators for achieving financial independence included being debt-free (56%), having sufficient emergency savings (51%) and comfortably meeting daily expenses (43%).

Looking at financial resilience, the data published by the pensions firm revealed that nearly two in five (37%) don’t feel confident that they could cover any unexpected financial emergencies, a third (33%) said they don’t have any disposable income at the end of each month, and a similar number (35%) don't feel they are able to save enough for retirement. Also, 15% haven’t even started preparing for retirement and do not plan to.

Looking into the challenges the nation is facing in preparing for retirement, Scottish Widows’ research highlights the link between people’s sense of financial independence and feeling empowered to take control of their future finances. Affordable housing costs, emergency savings, being debt free, having some extra money after covering expenses - all things which drive a sense of financial independence - are closely linked with people’s willingness to take proactive steps for the future.

Generation Z feel the lack of financial independence most acutely, with 32% of those in their 20s feeling this way, compared with 24% of those in their 50s. People with disabilities (45%) and renters (34%) are also less likely to feel financially independent.

Pete Glancy, Head of Pensions Policy at Scottish Widows, said: “Feeling financially independent is the first step on the road to feeling financially empowered, which is essential when building your retirement income during your working life.

“Savers face a myriad of competing financial challenges – from managing their daily household budget to unplanned emergencies. With 15.3 million people currently at-risk of poverty in retirement, there is a clear need to help people understand how much they will need to cover their living costs in retirement, how much their projected pension is,  and how to take action if needed.

“But pensions should never be looked at in isolation. Accounting for goals like building emergency savings, housing security and considering other types of investments for the future is also key.

“Automatic enrolment has transformed how people save for retirement. But, as our research shows, to help more people achieve a decent standard of living later in life - especially those on low to middle incomes - targeted reforms are now needed. We’re calling on the Government to lower the auto-enrolment age to 18 and scrap the £10,000 earnings threshold, so more young, part-time, and self-employed workers who are currently excluded, can start saving for a better retirement.”

“The results of the second phase of the Government’s Pensions Review could pave the way for policy change and hopefully help more people save for a better retirement.”
 

Download full press release (PDF, 154KB)

Notes

Methodology 

The research was conducted online by YouGov across a total 5,167 nationally representative adults aged 18+ in the UK between 22/01/2025 – 11/02/2025. This included a boost of 445 adults aged 18+ to better understand the retirement prospects of minority ethnic groups, also weighted to be representative of the UK minority ethnic population aged 18+. 

*First run in 2023 with the help of Frontier Economics, the NRF assesses the potential retirement outcomes for those aged 22 to 65. It is a projection based on the current savings and behaviours of individuals and takes a comprehensive view of sources of retirement income, including the State Pension, private pensions, other long-term savings, and inheritance.

The NRF compares the retirement income people are on track for to the costs they could face living expenses for different retirement living standards defined by the Pension and Lifetime Savings Association (PLSA) and housing costs for those who expect to rent or continue to pay off a mortgage in retirement.  

About Scottish Widows

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With more than £232bn assets under administration and more than six million customers, Scottish Widows’ award-winning product range includes workplace and individual pensions, annuities, life cover, critical illness and income protection, as well as savings and investment products.

More than two million customers access Scottish Widows products and services through the Lloyds Bank and Scottish Widows apps, in addition to accessing directly through independent financial advisers. The Scottish Widows Platform is trusted by more than 18,000 advisers and 5,400 advice firms, which manage the pensions and investments of almost 166,000 clients.