New research from Legal & General (L&G) highlights growing anxiety among UK millennials about their retirement prospects. The study, conducted in 2025, reveals that three in five (62%) millennials fear they may need to return to work after retiring, while nearly half (49%) admit they have no retirement plan in place. With economic pressures mounting and the iconic Britpop band Oasis sparking conversations about comebacks, the findings underscore the urgency for younger generations to prioritise pension savings to avoid future financial regret.
Among those aged 28 to 44, 12% have no money saved for retirement, and 36% are unaware of their monthly pension contributions. Many face competing financial demands such as rising living costs, childcare, and debt repayment. The study also notes that 58% of millennials know friends or family who have returned to work after retirement, reinforcing concerns about long-term financial stability. A significant 78% say they would feel frustrated if their future selves lacked sufficient savings.
Katharine Photiou, managing director of L&G’s Workplace Saving Business, emphasises the importance of early action. “Don’t underestimate the power of early starts,” she says. “The earlier you start saving, the harder your money can work for you and the more help you’ll get from the government and your employer. While retirement might seem like a long way off, start saving early and you’ll reap the rewards.”
Photiou offers practical guidance for securing financial futures. She recommends beginning pension contributions as early as possible to benefit from compound interest, government tax relief, and employer contributions. She advises tackling expensive debt first to reduce financial strain and free up money for savings. She also encourages making use of cash ISAs for short-term goals or Stocks and Shares ISAs for longer-term growth. Finally, she points out that most UK workers contribute 8% to their workplace pension and that increasing contributions by even 1% can lead to substantial improvements in retirement savings, particularly if employers match the higher rate.
The research aligns with findings from other studies in 2025. A Standard Life report found that 66% of millennials worry they are not saving enough for retirement due to concerns about inflation and rising interest rates. A separate study by Phoenix Group revealed that 59% of millennials struggle to save because of short-term financial demands like childcare and housing. These challenges are often greater for women, who may face pension gaps due to caregiving responsibilities.
Despite the obstacles, millennials still have time to improve their retirement outlook. Automatic enrolment into workplace pensions, introduced in 2012, means many already have a basic level of savings. Increasing contributions, even modestly, can make a difference over time. Standard Life estimates that a worker earning £25,000 a year and contributing the minimum 8% from age 22 could have £210,000 by age 68. Adding just 2% more at age 30 could raise this to £252,000.
As economic uncertainty continues, millennials are being encouraged to take proactive steps. By starting early, managing debt, and taking advantage of workplace pensions, they can build a more secure retirement and reduce the risk of having to return to work in later life.
