Nearly one in three UK adults — an estimated 12.2 million people — are on track for a retirement that doesn’t cover basic needs. That’s according to the 2026 National Retirement Forecast, which projects that 31% of working-age adults risk falling short of even a minimum standard of living in later life. For someone approaching retirement with no private pension, this means relying almost entirely on the State Pension — currently worth up to £11,502 a year — and hoping housing costs stay low. The gap between what you have and what you need can feel enormous, but the picture isn’t static.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The 2026 forecast shows improvement — 39% were at risk in 2025, so 8% of people moved from a projected “less than minimum” retirement to a “minimum” one. About half of that shift comes from lower assumed costs for basic living, partly because energy prices fell. The other half reflects people with no pension arrangements who now have slightly higher pay, more savings, or home ownership that reduces housing costs in retirement. But the median projected household retirement income rose only £200, from £25,700 to £25,900. That’s not a transformation. For anyone without a pension pot, the question isn’t whether you can build a comfortable retirement from scratch — it’s whether you can build a secure enough one. Here’s what you actually need to know.
What the 2026 Retirement Forecast Actually Tells Us
The central concept here is the Retirement Living Standards — benchmarks published by the Pensions and Lifetime Savings Association that define minimum, moderate, and comfortable retirement lifestyles. The minimum standard in 2025 assumes about £14,400 a year for a single person. The full State Pension covers most but not all of that. If you have no private pension, the gap is roughly £2,900 a year — every year of retirement.
What I tend to notice is that people focus on the headline risk figure — 31% — without asking what changed. The improvement from 39% to 31% is real, but half of it came from lower assumed energy costs that could rise again. That’s not structural progress. The other half came from people with no pension having slightly better finances overall, which is fragile. The real question is whether your own situation is improving, not whether the national average is.
The Numbers That Actually Govern Your Retirement Without Savings
If you have no private pension, your retirement income comes down to three things: the State Pension, any other benefits you qualify for, and how much you need to live on. The full new State Pension is £11,502 a year in 2025/26, but you need 35 qualifying National Insurance years to get it. Fewer years means less. Someone with 20 qualifying years gets about £6,572 a year. That’s £547 a month.
The minimum Retirement Living Standard for a single person is roughly £14,400 a year. That leaves a gap of about £2,900 if you have the full State Pension, or £7,828 if you have only 20 NI years. That gap has to come from savings, part-time work, housing equity, or means-tested benefits like Pension Credit.
→ Scroll right to see all columns
| Retirement Standard | Single Person (Yearly) | Couple (Yearly) |
|---|---|---|
| Minimum | £14,400 | £22,400 |
| Moderate | £31,300 | £43,100 |
| Comfortable | £43,100 | £59,000 |
Now look at what the forecast actually shows for people with no pension. The improvement in the 2026 data partly reflects that this group has slightly higher pay and more non-pension savings than in previous years. But “slightly higher” doesn’t close a multi-thousand-pound annual gap. The median projected household retirement income across all UK adults is £25,900 — that’s for households, not individuals. A single person relying only on the State Pension is well below that.
Regional differences matter too. In London, 38% of adults are projected to fall below the minimum standard — the highest rate in the UK. In the South East, it’s 25%, the lowest. But London also has a higher share of people on track for a comfortable retirement (34%), which suggests more polarised outcomes. The North East has the lowest median projected household retirement income at £22,000. If you live there with no private pension, the gap between what you’ll get and what you need is wider than the national average suggests.
For anyone without savings, the most practical lever is checking your NI record and topping up missing years if you can. Each missing year costs you about £328 annually in State Pension for life. A financial advisor can help you work out whether buying missing NI years is worth it based on your age and life expectancy.
Errors and Gaps That Cost You Retirement Income
Assuming the State Pension covers everything
The most common mistake is thinking the full State Pension of £11,502 is enough. It isn’t, unless you live very frugally and own your home outright. The minimum standard assumes you spend about £14,400 a year. That £2,900 gap is real money. Someone who retires at 66 and lives to 86 needs an extra £58,000 over those 20 years. If you haven’t planned for that, you either work longer, spend less, or rely on benefits you may not know about.
Missing NI years without realising
You need 35 qualifying years for the full State Pension. Many people assume their work history covers it, but gaps from career breaks, low earnings, or living abroad can reduce your entitlement. Each missing year costs roughly 1/35th of the full pension — about £328 a year, every year of retirement. You can check your NI record on GOV.UK and pay voluntary contributions to fill gaps, usually going back six years. The deadline for filling gaps from 2006 to 2016 was extended to April 2025, but future years have tighter windows. Missing that deadline means losing the chance to buy those years permanently.
Not claiming Pension Credit
Pension Credit tops up your income if you’re over State Pension age and on a low income. In 2025/26, it guarantees a minimum of £218.15 a week for a single person. If your State Pension is below that, Pension Credit can bridge the gap. But take-up is low — the government estimates hundreds of thousands of eligible households don’t claim. It also unlocks other benefits like help with housing costs, council tax reduction, and a free TV licence for over-75s. The application is done by phone or online, and you can backdate claims by up to three months.
Opting out of workplace pension schemes
Auto-enrolment means most employees are automatically placed into a workplace pension. Opting out saves a few pounds now but costs far more later. A 25-year-old who opts out for five years loses not just their own contributions but their employer’s and the tax relief. Over a career, that could mean tens of thousands less in retirement. If you’re self-employed or in a job without auto-enrolment, you don’t get that nudge at all — and the data shows people without pension arrangements are more likely to fall below the minimum standard.
What I’d flag here is the NI record check. It’s free, takes ten minutes on GOV.UK, and the cost of not doing it is measurable. A tax specialist can review your NI history and tell you exactly which years are worth buying.
How to Build a Retirement Plan When You Have No Savings
Start with your State Pension entitlement
This is your foundation. Check your NI record on GOV.UK using the State Pension forecast tool. It tells you how many qualifying years you have, how much you’re on track to receive, and whether you can pay voluntary contributions to fill gaps. The process takes about five minutes if you have your National Insurance number. If you’re more than a few years from retirement, you still have time to build qualifying years through work, credits for caring responsibilities, or voluntary payments.
Maximise your workplace pension if you have one
If you’re employed, you’re probably auto-enrolled. The minimum total contribution is 8% of qualifying earnings (at least 3% from your employer). That’s not much, but it’s better than nothing. If you can afford to contribute more — even an extra 1% — the compounding effect over a decade or two is significant. If your employer offers to match higher contributions, that’s free money. Don’t leave it on the table.
Consider part-time work in retirement
The Retirement Living Standards assume you stop earning entirely. Many people don’t. Working part-time for a few years after reaching State Pension age can bridge the gap between your pension income and your actual costs. The first £12,570 you earn in 2025/26 is tax-free under the personal allowance, so you can earn that amount without paying income tax on top of your State Pension. That alone could cover the £2,900 gap and leave room for more.
Look at your housing situation
The forecast data shows that home ownership is one of the strongest predictors of a comfortable retirement. If you own your home outright, your housing costs are minimal — just maintenance, insurance, and council tax. If you’re still paying a mortgage or renting, your retirement income needs are much higher. Downsizing or moving to a cheaper area can free up equity and reduce monthly outgoings. For renters, the challenge is steeper: you need enough income to cover rent for potentially 20 or 30 years.
Understand the future rule changes
State Pension age is rising. It’s currently 66, moving to 67 between 2026 and 2028, and scheduled to reach 68 between 2044 and 2046. If you’re under 50, you may not get your State Pension until 68. That means a longer gap between stopping work and receiving it, which you need to fund from savings or work. Auto-enrolment is also changing: from 2025, the lower earnings threshold for contributions is being removed, meaning contributions start from the first pound earned. That will boost pension savings for lower earners, but it’s not yet in force.
For anyone without savings, the most practical next step is to build a realistic budget based on what you actually have, not what you wish you had. The gap between your State Pension and your costs is measurable. Once you know it, you can decide how to close it — through work, benefits, housing moves, or a combination.
Frequently Asked Questions
What happens if State Pension age changes before I reach it? ▾
Can I get Pension Credit if I own my home? ▾
How much does it cost to buy a missing NI year? ▾
What if I’ve never paid into a private pension? ▾
Does the State Pension count as income for means-tested benefits? ▾
Can I defer my State Pension to get a higher amount? ▾
Your Next Move When Retirement Savings Are Thin
The 2026 forecast shows improvement, but 12.2 million people still face a retirement below minimum standards. The difference between those who manage and those who don’t often comes down to three things: knowing your State Pension entitlement, claiming every benefit you qualify for, and having a realistic plan for housing costs. The gap is measurable — roughly £2,900 a year for someone with the full State Pension. That’s not an impossible number to close, but it requires action now, not at retirement.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Retirement Regrets: How to Avoid Them Before It’s Too Late.
Sources and Further Reading
Is Your Pension Enough? 5 Ways to Boost Your Retirement Income — Practical steps for increasing your retirement income, whether you have savings or not.
Retirement on a Budget: Maximising Your Money Without Sacrificing Your Dreams — How to make the most of a limited retirement income without feeling deprived.
Scottish Widows (2026). National Retirement Forecast. 🔗
Pensions and Lifetime Savings Association (2025). Retirement Living Standards 2025 Update. 🔗
