Three life events that could knock your retirement off course

Retirement adequacy is no longer just about how much you’ve saved but is increasingly shaped by family obligations, silver separations and caring responsibilities.

According to a major new report by the Pensions Policy Institute for the Association of British Insurers, titled Pensions Adequacy: Housing, Households and Auto-Enrolment, changing family dynamics are creating new pressures that could leave more people falling short in retirement.

Drawing on the report’s findings, PensionBee highlights three increasingly common life events that can derail retirement adequacy: supporting adult children through the ‘Bank of Mum and Dad’, divorce and caring responsibilities.

While very different, each can interrupt earnings, reduce pension contributions or delay long-term saving entirely, making it harder for people to build the retirement savings they need.

Life event 1: The Bank of Mum and Dad.

Maike Currie, vice president of personal finance at PensionBee, said: “Retirement adequacy isn’t simply about how much money sits in a pension pot. It’s also about the financial commitments that continue throughout our working lives. Supporting children is often one of the biggest of those commitments, and it’s becoming an increasingly important part of the retirement picture.”

Life event 2: Divorce: a clean break versus a fair break

Currie said: “Divorce is one of the biggest emotional and financial events in a person’s life with pensions often treated as an afterthought. People naturally focus on the family home because it’s tangible, but retirement can last 20 or 30 years. Giving up pension wealth without understanding its long-term value can have consequences that last a lifetime.”

Life event 3: Caring responsibilities

Currie added: “The hardest conversation many of us will ever have with our parents isn’t about inheritance, but care. Yet too often that conversation only happens after a crisis, when choices are already limited. Women are particularly exposed. Many experience the motherhood penalty in their thirties, only to encounter the good daughter penalty in their forties and fifties as they become the default carer for ageing parents. The timing is brutal, arriving just as careers and pension saving should be accelerating. Caring is one of the biggest hidden risks to retirement adequacy. If we value unpaid care, and we should, we also need to think about how we protect the long-term financial security of the people providing it.”