It is human nature to focus on what feels immediate. We tend to act on the things that affect us right now rather than what might matter years down the line. Psychologists call this Present Bias, and it plays a bigger role in our financial lives than most people realise.
The latest Standard Life 2025 Survey shows that 23% of people plan to move money into cash savings rather than investments. This feels safe and sensible in the short term, but it can mean missing out on the potential long-term growth that investments provide.
This is “Present Bias” at work. The comfort of today often outweighs the opportunity of tomorrow.
A Generation Saving Without Feeling the Benefit
Over the last 15 years, the UK has seen the introduction of auto-enrolment, which automatically includes anyone between 22 and state pension age in a workplace pension earning in excess of £10,000 per year. It is one of the most powerful tools for long-term wealth creation ever introduced, offering decades of steady contributions and compounding growth.
However, for many people in their twenties or thirties, the idea of retirement feels a lifetime away. When you are dealing with rent, childcare, and the rising cost of living, saving for something that will happen in 40 years can easily slip down the list of priorities.
The challenge is that minimum contributions of 8% are unlikely to provide the lifestyle most people hope for. According to the Pensions and Lifetime Savings Association, a moderate standard of living in retirement costs around £31,300 a year, while the average UK pension pot remains below £80,000.
This gap is significant. Yet because of Present Bias, many believe that auto-enrolment alone will be enough.
The Government’s Long Game
There are also wider changes that may shape how people think about retirement. Draft plans to include unused pension funds within Inheritance Tax (IHT) could make a big difference in the decades ahead. If this policy is confirmed, the government stands to gain significantly from the compounding growth of untouched pension funds.
It is a clever financial strategy for the Treasury, but it raises important questions. If the next generation’s pensions become taxable under IHT, could this help the government justify reducing reliance on the state pension?
The triple lock, which guarantees that the state pension rises by the highest of inflation, wage growth or 2.5%, is one of the government’s most expensive commitments. At some stage, a future government may have to decide whether it remains affordable.
The message is clear. Relying on the state pension alone could be risky. The responsibility for a secure retirement now rests increasingly on the individual.
“I Wish I Had Planned Sooner”
According to Standard Life’s survey, 21% of retirees wish they had planned their retirement more thoroughly. This does not mean simply saving more. It means planning with purpose, flexibility and understanding how decisions today shape the options available tomorrow.
Thorough planning means having conversations about what retirement will actually look like. It involves scenario planning, testing different outcomes, and being honest about the lifestyle you want and the cost of maintaining it.
Imagine reaching retirement age and realising that a few small changes years earlier could have doubled your financial comfort. That is not a pleasant thought, yet it is the reality for many people who delay serious planning.
Half of Working People Expect to Work Beyond State Pension Age
Perhaps the most concerning statistic from the Standard Life 2025 Survey is that almost half of working adults expect to work past the state pension age in order to afford their lifestyle.
This is not about loving your job or wanting to remain active. It is about necessity. Many people are beginning to realise that their current savings and contributions may not provide the freedom they hope for in later life.
This is the retirement gap in action. It grows wider every year that Present Bias keeps people focused on the demands of today rather than the needs of the future.
Turning Awareness Into Action
The encouraging news is that awareness changes behaviour. Once you recognise why it feels easier to delay planning, you can start to challenge that instinct.
There is also an important shift needed in how people think about financial advice. It is often seen as something you turn to later in life, perhaps in your fifties or sixties, when retirement feels closer. Yet if these statistics tell us anything, it is that acting sooner can make all the difference between reaching your financial goals and falling short of them.
Working with a financial adviser helps bridge the gap between present comfort and future security. Advisers help clients make informed decisions, stress test their assumptions and ensure their retirement plans evolve with life’s changes.
The goal is not only to plan for retirement but to plan for choice. A strong financial plan gives you freedom later in life to live on your own terms rather than within your limits.
Final Thoughts
The findings from Standard Life reveal more than numbers. They reflect how our psychology, habits, and assumptions shape the way we prepare for the future. They show that many people lack confidence, knowledge, and awareness when it comes to retirement.
But this is not a bad thing. These insights give us a starting point for meaningful conversations. They highlight the importance of discussing retirement early and treating it as an ongoing journey rather than a last-minute task.
Retirement should be something to look forward to, not something to fear. It should reward decades of work with peace of mind and opportunity.
Your future self deserves the same care and attention that your present self demands. The sooner you start that conversation, the more powerful it becomes.
Important Information
This article is for information only and should not be taken as personal financial advice. The value of investments can go down as well as up, and you may get back less than you invest. Tax treatment depends on individual circumstances and may change in the future.
If you are considering your own retirement planning or would like to understand your pension options, we recommend seeking regulated financial advice. We can help you explore what this means for your circumstances and build a plan designed around your goals.
