We all have to work and make money, with the eventual payoff being getting to retire and collect your pension.
Given that the state pension won’t get you very far — as of 2025, it’s only £221.20 per week, and that’s unlikely to rise by much in the future — workplace pension schemes can be incredibly helpful when it comes to boosting the amount of money you have to play with once you stop working one day. They’re pretty much a no-brainer, especially when many employers will match your contributions. However, many members of Gen Z don’t see it that way. More and more, they’re pulling out of workplace pensions altogether, and while those of us who are a bit older can see disaster coming, this generation has pretty strong feelings about why these schemes just aren’t worth it.
1. They’re grappling with the cost-of-living crisis just like the rest of us.
For many of Gen Z (and every other generation), it’s a struggle just to cover the basics. Between crazy high rent, skyrocketing food prices, and bills that seem to go up every month, there’s not much left over to even think about saving. So, when you’re faced with the option of putting money into a pension or paying the rent, the rent is always going to win, right? With so many people just trying to keep their heads above water, the idea of saving for a far-off retirement just feels like a luxury, especially when the financial pressure of now is so heavy. That’s why immediate financial needs take precedence. It’s not that they’re ignoring their future, but the reality of the present makes it tough to look too far ahead. When you’re scraping by month to month, the long-term payoff of a workplace pension seems a bit too abstract to be a priority.
2. The student loan burden is massive.
Student debt is no joke, and for many in Gen Z, it’s the elephant in the room. With tuition fees slowly but steadily rising and loan repayments hanging over their heads once they graduate, it’s no wonder many are putting retirement savings on the back burner. It’s tough to get excited about something that’s decades away when you’re still trying to dig yourself out of the hole created by those hefty student loans. The priority is paying down that debt first, so contributing to a pension can feel like a distant dream that’s just too far out of reach. Many people in Gen Z feel like they haven’t even had the chance to start saving because they’re still focused on getting through the debt cycle. Tackling those student loan repayments feels like the more immediate and realistic goal, and pensions don’t quite register as a pressing concern just yet.
3. They prioritise financial freedom over retirement planning.
For Gen Z, it’s all about using their money the way they want to in the here and now. Rather than focusing on saving for retirement, many would rather put their money into building an emergency fund, investing in side hustles, or saving for experiences like travel. Retirement, frankly, feels like something for people who are much further down the line in life. In the meantime, they’re more interested in flexibility, independence, and creating a life they can enjoy today, not decades from now. That approach to money means that workplace pensions just don’t have the same appeal. Why lock away money for 40 years when you can invest in things that give you control and bring you joy now? It’s about living with intention, not waiting for a future you can’t predict.
4. They don’t trust the system.
Gen Z’s scepticism about the system, especially when it comes to workplace pensions, is rooted in a mix of economic instability and the messy reality of today’s world. With stories about pension schemes being underfunded, the government fiddling with retirement ages, and uncertainty about how long these schemes will even exist, it’s no wonder many are doubtful about putting their money into something they’re not sure will be there when they need it. Instead, they’re turning to alternatives. Whether it’s property investment, cryptocurrency, or starting their own businesses, Gen Z is more inclined to trust themselves than the traditional pension system. They’re looking for more reliable, hands-on ways to build wealth that give them control over their future.
5. They’re struggling with job instability.
Job instability is something that many Gen Z workers know all too well. With a rise in freelance gigs, zero hours contracts, and part-time roles, many are left without access to the kind of benefits that traditional full-time work offers, like a workplace pension. This means that, even if they wanted to save for retirement, they don’t have the structure or the job security to make that happen consistently. With this kind of unpredictable income, pensions feel like a far-off luxury. When you’re not sure where your next pay cheque is coming from or what your work situation will look like in six months, it’s hard to put money aside for something you can’t access for years.
6. They’re focused on short-term goals.
From trying to buy a house to saving for a wedding or taking that long-awaited holiday, many in Gen Z are much more focused on short-term financial goals than thinking about retirement. And who can blame them? The dream of buying a home feels like it’s slipping away for a lot of people, and that immediate goal takes precedence over something like a pension, which seems far off in the future. When you’re working hard to make these major milestones happen in the present, it’s tough to prioritise something that feels as distant and abstract as retirement. For many, the short-term goals are the real wins, and pensions just don’t feel like a pressing concern right now.
7. They prefer flexible savings options.
Flexibility is key for Gen Z, and pensions, with their restrictions and the inability to access funds until a much later stage in life, just don’t tick the box. Many prefer savings options like ISAs, high-interest savings accounts, or investment apps, where they can control their money and access it when they need it. These options offer immediate flexibility and more control over their financial situation, making them far more appealing than the rigid nature of pensions. The thought of locking away money for decades doesn’t align with their desire for freedom and adaptability. They want options that give them control now, not when they’re in their 60s or beyond.
8. They’re prioritising mental health over financial stress.
Source: Unsplash One of the things Gen Z is doing differently is taking mental health seriously. The pressure to save for retirement, on top of dealing with the stress of everyday expenses, can feel overwhelming. For many, the idea of stressing over pensions when they’re already dealing with the pressure of just getting by feels like too much. This generation is more vocal than ever about prioritising self-care and mental well-being. So, instead of adding to that stress by worrying about a future they can’t control, many are choosing to focus on what makes them happy and healthy today. For Gen Z, the present matters just as much, if not more, than the future.
9. They don’t really get how pensions work.
Source: Unsplash Pensions are complicated, and for those just starting out in their careers, they can seem like a maze. With all the jargon, the rules about contributions, and the uncertainty about how much money you’ll end up with, it’s easy to see why pensions feel like a mystery to many in Gen Z. Without clear guidance or easy-to-understand advice, it’s hard to get excited about saving for something that feels so distant and complex. Simplifying the process, offering relatable advice, and helping younger generations understand how pensions work could go a long way in getting them more engaged. Until then, pensions might continue to feel like something you should care about but don’t really understand well enough to take seriously.
10. They’re sceptical about retiring at all.
The traditional idea of retiring at 67 (and rising!) feels outdated to many in Gen Z. With the pension age increasing and the reality that many may need to keep working well into their 70s (or even beyond), the idea of a ‘traditional retirement’ is starting to lose its appeal. For many, the focus is on financial independence rather than waiting until a set age to stop working entirely. Instead of planning for retirement, Gen Z is more likely to think about how they can work on their own terms, with the flexibility to pick and choose what they do as they get older. That change in perspective means that pensions aren’t seen as the ultimate financial safety net they once were—they’re just one small piece of a much bigger puzzle.
11. They prefer investing over pensions.
Source: Unsplash With the rise of investment apps and platforms that make it easy to get started in things like stocks, ETFs, and even cryptocurrencies, Gen Z is turning to investments that offer more control and flexibility. Unlike pensions, which are locked away for decades, investments provide an opportunity for quicker returns, and the potential for higher gains feels more aligned with the goals of this generation. Investing feels like an exciting and personal way to build wealth, compared to the long-term, somewhat boring nature of pensions. It’s not that pensions aren’t a valid option—it’s just that for Gen Z, the flexibility and potential rewards of investing are much more appealing right now.
12. They’re focused on building multiple income streams.
Gen Z is all about diversifying their income. Side hustles, freelance work, and passive income are all on the table, and they see these things as a way to secure financial stability. The idea of relying solely on an employer and a workplace pension doesn’t quite fit into their strategy of building a secure financial future. By juggling multiple income streams, Gen Z is creating their own version of financial independence. This flexible approach to money feels more relevant and attainable than the traditional method of contributing to a pension, especially when there’s no one-size-fits-all career path anymore.
13. They want more ethical and sustainable options.
Gen Z cares a lot about ethics and sustainability, and they want their money to align with their values. Many pension schemes, however, still invest in industries like fossil fuels, arms manufacturing, or tobacco, and that’s a big turn-off for this generation. They’re looking for pensions that reflect their values, with more transparency about where their money’s going and how it’s being used. Pension providers who offer ethical or sustainable investment options are likely to attract more interest from Gen Z. This generation is keen to invest in the future, not just their own, but the planet’s as well.
