The UK faces a tapestry of interconnected challenges around retirement security. Recent reforms and the findings of the 2025 Global Retirement Index suggest a certain resilience. However, there are also vulnerabilities that threaten the prospects of future generations.

The challenge of retirement security is global and complex. For many of us, visions of a secure and fulfilling retirement – one filled with travel, leisure, and time with loved ones – is increasingly clouded by financial uncertainty.

Many of the fears we share for our prosperity in retirement are captured in the findings of the 2025 Natixis Global Retirement Index (GRI)¹. As the analysis of the report highlights, retirement planning begins with a simple question: will I have enough? For 40% of individual investors surveyed globally, the answer remains far from certain².

Despite efforts to save, unpredictable factors like job loss, health issues, and AI-driven workforce changes make it difficult to forecast how long one will work or live. Outside a few specialised annuity products, there are no guarantees on market returns or interest rates, making it hard to gauge what retirement income will really look like in the future.

The big picture

In 2025, investors have the immediate concern presented by inflation, which 38% globally say is killing their retirement dreams¹. Rising prices may have slowed in many regions, but the cumulative effects of a prolonged bout of inflation has hit household budgets hard. Faced with higher costs for everyday essentials, investors worldwide say they are saving less as a result.

Dave Goodsell, Executive Director for the Natixis Center for Investor Insight, and the author of the GRI report, commented: “Only 44% of individuals in the UK were confident that inflation was in the rearview mirror when we surveyed them in March and April. The truth is there had been little in the way of inflation for a long time – this last bout was large and has been prolonged.

“In the UK, 65% say it’s eroded the future value of their retirement savings. Another 58% say they are saving less because of higher prices, and more than half (52%) say their investment gains have been whittled away by inflation. So, it was a big wake-up call on just how far and how fast prices can run up, and there’s still a lot of scar tissue.”

As individuals try to piece together a reliable income stream, government benefits are a critical part of the puzzle. But with 33% of investors worried about potential cuts, confidence in public pension systems is waning¹. Ageing populations and mounting public debt are straining national retirement programs, and even countries with automatic inflation-linked adjustments are seeing gaps between rising costs and benefit increases.

The UK placed at 14^th in the GRI, the same as it ranked last year. Created in collaboration with CoreData Research, the index assesses factors such as healthcare access and cost, climate, governance, and overall population well-being across four sub-indices, which together provide a full picture of the retirement environment in each country.

“Retirement security isn’t a one-dimensional issue,” said Dave. “There are many questions facing retirees, one of which is certainly is if their pension income is sustainable at the long term. But we also look at a lot of different indicators.

“Some, like old age dependency, are long-term and slow-moving. Others like interest rates and inflation are more fluid and can change with greater speed and frequency. The countries that consistently rise to the top show a better balance across all indicators rather than out performance on any one particular factor. The GRI rewards that consistency.”

A complex conundrum

In the UK, material wellbeing and income equality scores have declined over the past year, while the UK labour market has shown lingering vulnerability too, which is reflected in the decrease in its unemployment score, and sending its ranking down to 20^th from 15^{th 1,3}.

Alongside the weaker employment data, the country’s income equality score has decreased by three percentage points, leading to a rank of 38^th compared to 33^rd a year ago. Its income per capita score declines by two percentage points but does not impact its rank (18^th)1.

“This score could improve in the coming years as inflation has eased, and interest rates are likely to be on a downward trend,” said Dave. “This is all good news for retirees on a fixed income, but rates are a double-edged sword. On one side, lower rates tell us inflation is easing which helps retirees maintain purchasing power. On the other lower rates can make it hard for retirees to annuitize their savings.”

There were some bright spots for the UK too. In the Health sub-index, the country improved and claims the tenth spot, up from 18^th place last year. The UK also sees its life expectancy score rise from 78% to 88%, climbing ten places to land 17^th overall. Since the aftermath of the Covid-19 pandemic, the country has steadily been increasing its score within this indicator¹.

Another stable performance within the Quality of Life sub-index places the country11^th for the third consecutive year. The UK also remains first among all GRI countries in water and sanitation. Elsewhere, a decrease in air quality score is balanced by increases across both the biodiversity and habitat and environmental factors1.

It’s also worth pointing out that the UK came in second place in terms of the larger developed countries, with Germany (8^th) being the only large, developed country to break into the top ten¹.

Dave explained: “Norway, Ireland, Switzerland, Iceland, and Denmark make up the top five and have all demonstrated consistency across the underlying indicators, but they also have another advantage. Because they are countries with smaller populations it can make it easier for policy makers to reach consensus on the issues that really matter to retirement security.

“That can be an inherent challenge for larger countries where there are a wide range of constituents, more diverse objectives, and more complex systems. Indeed, that’s why we include a large country ranking within the index.”

Fit for the future

The size and scale of the complexity facing providers of retirement security in the UK shouldn’t be underestimated. The state pension currently plays an outsized role, providing the majority of retirement income for most pensioners and the entirety of it for 13%. Meanwhile, ongoing debates swirl around the future of the so-called ‘triple lock’, state pension age (currently 66 and set to rise), and whether the system can remain sustainable and fair in an ageing society dealing with stretched public finances^3,4,5.

Recent reforms aim to bolster system resilience by consolidating pension funds, creating ‘mega funds’, and exploring the inclusion of more illiquid, higher-returning private assets such as infrastructure and private equity in pension portfolios. New regulations will require more explicit risk assessments and a balancing act between intergenerational equity and fiscal sustainability^3,4.

Andrew Benton, Executive Managing Director and Head of Northern Europe and MEACA at Natixis IM, said: “When we look at the Leeds Reforms announced by the chancellor, Rachel Reeves, in her Mansion House speech during the summer, it’s clear there's never been more thought provoking change going on within pensions and investment provision for retirement than there is today. More can done, of course, but we’re seeing retirement security increasingly becoming more of a shared responsibility across individuals, governments, financial service providers and employers.

“And it needs to be, particularly in a world where we’re moving from defined benefit to defined contribution, where the state benefit retirement age gets higher, and where there are questions around the sustainability of the triple lock – and even the means testing of state pensions. The undeniable outcome is that the responsibility for retirement provision rests with the individual more so than it ever has done, and not with a paternalistic employer or indeed a paternalistic government.”

Much can be achieved by early engagement, discussing retirement with a financial adviser or wealth manager – covering everything from boosting employer and personal contributions to consolidating pension pots and tax planning. But there’s no getting away from the industry appetite to including private assets in the mix, with various new offerings allowing DC savers access to such markets³.

“As we shift from DB to DC provision, it’s having an important impact on asset allocation and a demand for more diverse portfolios that include private assets,” Andew continued. “Liquidity is a challenge, but the industry is already delivering solutions for this. It’s also worth remembering that we are looking at solutions for some of the longest-term investors in the market, where the characteristics of private assets are a great match for their long-term growth requirements.”

“So, provided we can structure private assets in portfolios in the right way, it’s likely to be an important part of solution for financial security in retirement for years to come.”

The revived Pensions Commission, unions, industry, and consumer advocates all agree that it will take consensus and innovation to build a system ‘fit for the future’ ^1,3. Ultimately, the goal is not only to shore up finances but to provide the next generation of retirees with the means and opportunity to enjoy healthy, fulfilled later lives.

For individuals, that means proactive planning and informed dialogue with professional advisers. For institutions, it means smarter structures and better products. Collectively, the ambition is to make retirement work for all – environmentally, financially, and socially^1,3,6.

And as the GRI has shown over its 13-year history, achieving retirement security isn’t getting any easier.

 Written in September 2025