Four steps to take now to avoid pension poverty

How much have you saved for your retirement so far? And is it enough? Find out why too few people know the answer to these questions, and four steps you can take to avoid pension poverty.

If you haven’t actively started planning and saving for your retirement yet, you are not alone. The recent interim report from the Pensions Commission discovered that 45% of working-age adults in the UK are not saving into a pension at all, and at least 15 million people are not saving enough to retire.

One reason for this is that most financial advice is dry and likely to make you feel bad about what you haven’t done yet. Much of it can feel like a lecture, telling us to budget harder and cut back, when many of us are already juggling the household bills and expenses of living day to day.

So so wonder most people avoid checking their pension pot until mandatory admin forces them to. But according to the 2026 Scottish Widows Retirement Report, ignoring the numbers comes at a high price:

31% of UK adults are on track to fall below even a minimum standard of living in later life.
The UK population is divided almost equally, 31% facing less-than-minimum standards, 30% heading for a basic retirement, and 30% on target for a comfortable one.
Over a third of part-time and self-employed workers risk falling short, compared to under 1 in 5 full-time employees.

Susan Hope, Retirement Expert at Scottish Widows, says it’s time to drop the guilt. She believes that taking control isn’t about being a maths genius or a financial expert. Instead, securing your future starts with personal confidence and building something you can actually look forward to.

Pensions only mean something when they feel personal. Financial advice shouldn’t be about shaming people for short-term budget struggles or forcing anyone to sit through an overwhelming maths test. It should be about taking back control of your own future.

Four steps to take now to avoid pension poverty

When long-term saving feels far away, it’s easy to ignore. But building real financial confidence starts with dropping the guilt, connecting your income to the life you actually want to live, and taking small, manageable steps that protect your independence down the line.

With that in mind, Susan is sharing four practical pension actions you can take now to help you plan your retirement.

1) Make a plan, but be realistic

Before diving into spreadsheets and sums, start by picturing your ideal retirement. What does ‘comfortable’ mean for you? Everyone’s version looks different – from a simple, steady life at Butlins (a minimum lifestyle) to city breaks in Barcelona (a moderate lifestyle) or island escapes in Barbados (a comfortable lifestyle). Thinking about these scenarios helps make pensions feel more personal. Until we really start to imagine the type of retirement we want, we’re unlikely to feel invested in taking the steps needed to get there.

Once you’ve got that image in your mind, build a plan around it. Assess your current financial situation, set clear goals, and outline the steps needed to achieve them. Consider your income, debts, expenses, assets, career, potential life changes, and desired retirement age. It’s well worth seeking out professional financial advice and consulting online resources to help you build a retirement plan that works for your goals.

2) Understand the basics of retirement planning

When it comes to financial wellness, it’s key to have good money management skills to avoid costly mistakes. Upskilling helps you better manage your finances and make informed decisions about your money.

Start off by understanding the basics of saving, budgeting, investing, and retirement planning. Scottish Widows’ Retirement Calculator allows you to explore different scenarios and see how changes to your savings, contributions, or retirement age could affect future income. It’s a great way to get comfortable with numbers and understand the steps needed to achieve goals.

3) Maintain your contributions

Even during challenging times, it’s crucial to maintain pension contributions as much as possible. The longer you contribute, the greater the impact of compound interest. You can make it easier on yourself by automating payments when you get paid, so you can build wealth with minimum fuss.

If you’re facing financial difficulties, consider reducing your contributions rather than stopping them altogether – even small contributions are better than none, and you’ll still benefit from your employer’s contributions. Don’t miss out on the ‘free money’ that your company adds to your pot!

4) Use tech tools

Financial knowledge is power, and today’s technology makes building that confidence easier than ever, with pretty much every website having built-in AI chatbots designed to give instant support and answer your quick questions.

A great first step is downloading your pension provider’s app alongside the HMRC app to check your State Pension forecast, mapping your numbers against Pensions UK standards (where a minimum lifestyle for a couple costs £21,600 a year compared to £60,600 for a comfortable one).

Apps like Scottish Widows offer a host of interactive guides, calculators, games alongside tools like their Career Break Modeller and in-app Pension Tracing tool to locate lost pots from previous jobs using just your National Insurance number.

You’ll see the magic of compounding in real-time; for instance, discovering exactly how finding an extra £50 a month now can significantly outpace the averages over the long term.