Pension poverty hits half of adults living with health conditions

A growing number of individuals entering later life without the financial resources they require

Retirement planning is often built around a simple assumption: that we will continue working until we choose to stop. However, for millions of people across the UK, poor physical or mental health can significantly alter those plans, affecting earnings, career progression and the ability to save for later life.

However, research highlights the growing link between health and financial wellbeing. While 60% of UK adults expect to be fit enough to work until their planned retirement age, almost three in ten (29%) have had their working lives affected by physical or mental health challenges over the past five years[1].

When health changes financial plans

For many people, health-related issues have led to major changes in employment. Around 10% have stopped working altogether, 7% have reduced their hours and 6% have moved into less demanding or lower-paid roles.

The impact extends far beyond monthly income. Reduced earnings can mean lower pension contributions, fewer opportunities to save and less confidence when planning for retirement. Over time, these interruptions can have a lasting effect on long-term financial security.

A growing retirement divide

The findings reveal a concerning gap between people living with health conditions and the wider population. According to the latest National Retirement Forecast projections, 50% of adults whose physical or mental health affects their daily lives face pension poverty, compared with 27% of the general population[2].

These figures highlight how health and finances are often closely intertwined. When people are unable to work consistently or at full capacity, building an adequate retirement fund becomes considerably more difficult. The result is a growing number of individuals entering later life without the financial resources they need.

Concerns around future care costs

The report also highlights widespread uncertainty about funding care in later life. More than a third (34%) of adults have not yet considered what care they may need as they age, while over half (51%) are not confident they could afford it if required.

Among those living with physical or mental health conditions, concerns are even more pronounced. Two-thirds (67%) lack confidence in their ability to pay for future care, creating additional financial anxiety at a time when support may be needed most.

Small steps can make a difference

Health challenges such as chronic illness, burnout, caring responsibilities and menopause can force people to adjust their working lives unexpectedly. While these situations are often beyond an individual’s control, there are practical steps that can help strengthen financial resilience.

Reviewing your pension regularly, checking contribution levels and understanding how much you may need in retirement can all provide greater clarity. Even small increases in pension contributions can make a meaningful difference over the long term, thanks to compound growth.

Strengthening financial protection

Experts suggest that several measures could help reduce the risk of pension poverty. Saving earlier and contributing more to pensions can provide a stronger financial cushion should health issues interrupt employment later in life.

There is also growing attention on the UK’s protection gap. Products such as income protection and critical illness cover can provide valuable financial support when earnings are disrupted. Alongside this, better access to financial guidance and tailored support could help individuals make more informed decisions about their long-term financial wellbeing.

Planning for the unexpected

While nobody can predict future health challenges, preparing for uncertainty can make a significant difference. Building retirement savings, understanding available protections and seeking advice when needed can all help improve financial confidence and security.

Looking to plan for the health challenges you may face in later life?

If you would like further information on retirement planning, pensions, protection or financial preparation for later life, please contact us today. We’ll help you explore your options and develop a plan to support your long-term financial wellbeing, whatever the future holds.

Source data:

[1] Research was conducted online by YouGov between 16 and 24 February 2026 among 6,224 UK adults aged 18+, including a boosted sample of 1,000 adults from minority ethnic backgrounds. Results were weighted to reflect the UK population.

[2] The National Retirement Forecast (NRF), developed with Frontier Economics, assesses the retirement prospects of people aged 22 to 65 by comparing projected retirement income with expected living and housing costs. The model is based on data from approximately 6,000 individuals.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.