A stark warning has been issued to financial advisers: consider a future without state pensions for your younger clients. This advice comes from Karen Ward, Chief Market Strategist at JP Morgan Asset Management for EMEA, who spoke at the Let's Grow conference hosted by Parmenion on January 22nd. Ward, with her government experience as Chair of the Council of Economic Advisers at HM Treasury, has a unique perspective on the sustainability of the UK's welfare state. She believes the UK may not be able to financially support its citizens in the future, and this is a concern that should be addressed now.
Ward highlights the UK's lack of financial literacy, with an average age of 12 in terms of financial knowledge, which is a significant disadvantage compared to other nations. If the state pension were to disappear, it could leave many retirees financially vulnerable. Research from Quilter, published in August 2025, emphasizes the critical role of the state pension, providing over 50% of income for those aged 80-84. A separate report from the Standard Life Centre for the Future of Retirement, released in December 2025, reveals a disturbing trend: an additional 250,000 people aged 60-64 are now living in relative income poverty compared to 2010, with the poverty rate for this group rising from 16% to 22%.
The state pension age is also set to increase from 66 to 67 starting in April 2026, further complicating matters. Ward paints a bleak picture, stating that the UK is setting the stage for a challenging future for its youth. She also points out that trust in financial services has not recovered from the 2008 financial crisis, but sees this as an opportunity for financial advisers to step in and provide trusted guidance.
This raises the question: should we be preparing for a future without state pensions? And if so, how can we ensure the financial security of our younger generations? These are critical discussions we must have to secure a stable future.
