Millennials, like Nishi Patel, 40, and Ruth Chipperfield, 36, worry the benefit will become too expensive to sustain over the coming years 

Nishi Patel and Ruth Chipperfield are among the many millennials who doubt the state pension will still exist by the time they retire – and have decided to take action with their savings now.

A key benefit now for retirees, the full new state pension is £230.25 per week, while the basic state pension stands at £176.45 – a number that increases in line with the triple lock promise (which ensures the state pension rises each year by inflation, wage growth or 2.5 per cent, whichever is highest).

Yet this benefit is the UK’s largest single area of welfare spending, according to the Office for Budget Responsibility, costing around £125bn in total pensioner benefits in 2023/24.

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Experts – and people like Nishi and Ruth – worry that this cost will continue to rise in the coming years, potentially prompting the government to scrap the state pension or significantly change its structure.

Nishi, who runs his own accounting practice in Northampton, takes pension saving extremely seriously because he fears for the future of the benefit.

Nishi says: ‘I live a frugal lifestyle, and my retirement goals help me to keep my spending in check’ (Photo: Ariel Cooper)

Speaking to The i Paper, the 40-year-old said: “I have zero expectation that I will be able to benefit from the state pension when I retire, and I think that other people absolutely shouldn’t rely on it.

“I’m paying into my personal pension and doing it via salary sacrifice to maximise tax savings, which is in contrast to most people who use the default tax at source.

“However, recently I came to the conclusion that I should be focusing on maxing my stocks and shares ISA contributions instead.

“Whilst they don’t offer tax relief when I pay into the ISA, I will get tax-free income when I withdraw money.

“Up to now I’ve been paying £2,000 a month into my SIPP, and I also contribute £1,650 a month into my stocks and shares ISA and then use that to buy index funds.”

He added: “I work on the basis that I need to retire at 50 and contribute accordingly. I utilise around 40 per cent of my income for pensions and savings.

“I live a frugal lifestyle, and my retirement goals help me to keep my spending in check. I don’t expect to retire at 50 for many reasons and I also believe that as my kids grow up and become more expensive, I will have to slow down my contributions so I’m trying to get ahead whilst I’m able.”

Research from JP Morgan Personal Investing shows that 44 per cent of millennials – broadly those born between 1980 and 1995 – do not believe the state pension will exist by the time they stop working.

Yet despite this doubt, 71 per cent in the same age group still believe people should be able to rely on the state pension alone.

Claire Exley, head of financial advice and guidance at the investment platform, said this highlights a “worrying disconnect between expectation and reality”.

Longer life expectancies and fewer working-age adults have “dramatically” pushed up the cost of providing the state pension, she explained.

She added: “And while the triple lock has seen it become relatively more generous over time, it is clear that many younger people have little faith that the state pension will be there for them when they retire.”

Under the triple-lock pledge – which ensures the state pension rises each year by inflation, wage growth or 2.5 per cent, whichever is highest – payments are due to increase by 4.8 per cent in April 2026.

Ruth shares many of the same concerns. She believes the state pension will likely survive in “some form or another”, but fears what that might mean for her standard of living later in life.

The 36-year-old, who runs jewellery design business Ruth Mary Jewellery in Birmingham, said she can’t currently afford to save towards retirement.

‘It does concern me that I don’t have my own pension set up,’ says Ruth (Photo: Georgina Little)

She is not currently paying into a pension herself as she and her husband are saving for a house – though he has recently increased his contributions from 6 per cent, topped up to 10 per cent by his employer, to 8 per cent, which brings it up to 14 per cent.

She added: “It does concern me that I don’t have my own pension set up. I am self-employed and do sometimes wonder whether I might be better off saving a pension instead of prioritising buying a house.”

Because she loves her work, she does not expect – or desire – to retire before 70. As long as she is “healthy enough, I feel it’s only right that I contribute as long as I am able to.”

How to boost your pension pot

Claire said it is important that younger savers contribute to a pension or take advantage of employer-matched contributions now to guard against any future shortfalls.

She explained: “If the state pension still exists and has kept pace with inflation – your future self will still be pleased you put away ample for your retirement.

“As with most things finance related, some early planning can ensure you have more options in the future, so whatever happens to the state pension, getting some guidance and advice on what you can do now is a good first step.”

Other steps to consider include deferring your state pension. If you do not think you need the state pension at 66, this can be a good option.

For every nine weeks you defer, you will get an extra 1 per cent, and if you defer for a full year, this works out as 5.8 per cent extra.

Whether this works out as beneficial in the long-term depends on how long you live for.

To receive the full state pension, you typically need 35 qualifying years of national insurance (NI) contributions. These can be received by paying NI via work, or receiving certain benefits.

If you have a gap in your record, you can also pay to receive extra years.

You need at least 10 “qualifying years” to get some form of state pension.

You can check your NI record on the Government website to see how many you have and you can pay voluntary contributions for the past six years. The deadline is 5 April each year.

The cost depends on the tax year you’re paying for, and you can apply online on the Government website.

But before paying to fill any gaps in your state pension, experts say you should check if you can do so for free.