Barometer Update

Is the UK Ready for Retirement?

Hargreaves Lansdown’s Savings & Resilience Barometer, created in partnership with Oxford Economics, is a powerful tool tracking the financial health of UK households. It shows where people are thriving and where they’re falling behind so we can better support long-term financial wellbeing.

Only 43% of UK Households on Track for Retirement

This reflects a shift in methodology from the PLSA’s "adequate" retirement standard to a more tailored Target Replacement Rate (TRR) model. This new approach sets retirement targets based on individual income levels, with a minimum income floor based on the Living Wage Pension. “We believe this gives a much more accurate picture of what people really need to maintain their lifestyle in retirement.”

September 2025 Highlights

Pension Adequacy

  • High earners face the biggest shortfalls averaging £64,800.
  • Lower earners fare better under the new model, with a gap of just £1,250, thanks to the state pension and auto-enrolment.
  • Including non-pension assets (like ISAs and investments) boosts adequacy from 46% to 54% especially for the self-employed, where adequacy jumps from 36% to 47%

Opportunities

The Barometer reveals a major opportunity in retail investing:

  • 8.8 million households could invest but 42% aren’t.
  • Even among the top 20% of earners, 31% aren’t investing despite having the means.
  • Meanwhile, 2.9 million households are investing when they may not be financially ready.

This mismatch highlights the need for better financial education and confidence-building, especially among:

  • Women: Only 28% of single women invest vs. 39% of single men.
  • Single people: Just 32% invest vs. 48% of couples.

We’re hopeful that the refreshed ‘Tell Sid’ campaign, aimed at encouraging investment engagement, will help shift the dial. Upcoming changes to the advice/guidance boundary could also be transformational – empowering people to strike the right balance between saving and investing.

The Barometer is already shaping both our internal strategy and external policy conversations.

  • Raising auto-enrolment contributions could help higher earners but may unfairly impact lower earners who are already close to adequacy.
  • HL is advocating for targeted incentives to encourage higher earners to save more, rather than blanket increases.
  • The Lifetime ISA (LISA) is a key tool for the self-employed. We’re recommending: – Extending eligibility beyond age 40 – Reducing the exit penalty from 25% to 20%

Read the full September 2025 Barometer report – and compare it with our June edition- on our website now.