A quarter of the UK’s working-age population – around 5.7 million people – do not believe they will ever be financially independent, according to the latest Retirement Report from Scottish Widows.
The survey found that being debt-free (56%), holding sufficient emergency savings (51%), and comfortably meeting day-to-day expenses (43%) were seen as the most important indicators of financial independence. Yet many individuals face significant challenges across these areas.
Nearly two in five respondents (37%) said they lacked confidence in their ability to cover unexpected costs, while a third (33%) reported having no disposable income at the end of each month.
In addition, 35% do not believe they are saving enough for retirement, and 15% have not started preparing at all and have no intention of doing so.
The report highlights that feelings of financial independence are closely linked to broader financial behaviours, including housing affordability, emergency savings, and the ability to plan ahead.
Those who lack independence are less likely to take steps to prepare for retirement, reinforcing the need for targeted support.
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.”
He added: “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.”
Glancy concluded: “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.”
