Happy 70th birthday, UK state pension...

You’re more important than ever before.

  • The UK state pension continues to provide the biggest source of income in retirement – at 43% of average income1
  • The number of people aged 65 and over is set to double in the coming century – to 26 million2
  • Automatic enrolment minimums should be increased from 8% to 12% to support our longer later lives.

5 July 2018 marks the 70th birthday of the NHS. Less prominence has been given to the modern state pension which is also celebrating its 70th birthday on this day. 

32% would be unable to cover basic living costs in retirement without the state pension

The foundation of today’s basic state pension – built on national insurance contributions -  was laid out in the 1942 Beveridge Report, and implemented by the National Insurance Act of 1946. 

Prior to 1948, contributory old age pensions were payable under the Widow's, Orphan's and Contributory Old Age Pensions Act of 1925, but coverage was mainly restricted to workers in manual occupations.  

Today, the state still provides the biggest source of income in retirement for the typical pensioner (43%). This is followed by occupational pensions (30%), earnings (16%) and other (11%).3

Sources of income in retirement for the typical pensioner

  • State pensions


  • Occupational pensions


  • Earnings


  • Other


Booming numbers of state pensioners, since 1948

Aviva’s research has identified that four-in-five (80%) of pensioners view the state pension as being important to their own retirement finances, with a third (32%) saying that they would be unable to cover basic living costs in retirement without the state pension.4

There has been a rising demand for the state pension over the past 70 years. In 1948 there were around 5 million people in the UK aged 65 and above. 5

Today, this population has boomed to nearly 12 million. It is estimated that this population will grow to 26.0 million by 2116 – representing nearly one-in-three (30.2%) of the total population.6

Since 1948 the state pension has been providing a universal foundation in retirement, but it is no more than a foundation. We need to encourage more of us to save more for our later life.

Automatic enrolment has brought nine million more people into workplace pensions since 2012. This is fantastic, but the minimum savings levels are insufficient to provide people with the level of  retirement they want. 

Aviva believes that the minimum contribution should be increased from 8% to 12% of earnings by 2028. Failing to do so could result in disappointment in retirement for millions in the years to come.

 It’s a big challenge, but one that we need to rise to – as our predecessors did in July 1948.

Alistair McQueen, Head of Savings & Retirement, Aviva UK Insurance



1. https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-201617

2. https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/datasets/tablea11principalprojectionuksummary

3. https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-201617

4. Representative survey of 1,200 people in UK aged 55 and over https://www.aviva.com/content/dam/aviva-corporate/documents/newsroom/pdfs/newsreleases/2003/Aviva_Real_Retirement_Report_Winter_unlocked_FINAL.pdf

5. https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/annualmidyearpopulationestimates/mid2017

6. https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/datasets/tablea11principalprojectionuksummary

Media enquiries:

Fiona Murphy, Aviva press office
M:  07384 451332
E: fiona.murphy@aviva.com

Notes to editors:

  • For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
  • Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
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