Rising living costs are not just affecting today’s bills
More than 1m people in Scotland could be undersaving for retirement, based on a Scotland-equivalent estimate of the latest Pensions Commission warning.
The Pensions Commission’s interim report, published on 19 May 2026, warned that 15 million people across Britain are currently undersaving for retirement, with that figure potentially rising to 19 million without action. Scaled to Scotland’s share of the official population, that is equivalent to around 1.2 million people in Scotland today, potentially rising to around 1.5 million.
For many households, this is not simply a case of choosing not to save. It is increasingly about whether there is anything left to save at all.
At Trust Deed Scotland, our own customer survey data found that 55% of customers are working extra hours to deal with debts they can’t afford to repay in full.
That paints a clear picture: many people are already stretching themselves just to cover everyday costs, before they can even think about building savings, emergency funds or pension pots.
Scotland’s retirement savings gap is becoming harder to ignore
Auto-enrolment has helped millions of workers start saving into a pension. But the Pensions Commission warned that the job is only ‘half done’, with many people saving only the minimum amount and others not saving into a pension at all.
The Commission reported that 45% of working-age adults, around 18 million people, are not saving into a pension at all, despite nearly half of them being in work. Scaled by population, that is equivalent to around 1.4 million people in Scotland.
MoneyWeek also reported that around 43% of the working-age population, equivalent to 15 million people, are undersaving based on retirement income replacement measures used by the Commission.
That matters because the longer someone goes without saving enough, the harder it can be to catch up later.
Cost of living pressure is changing financial priorities
The challenge is that pension saving competes with immediate financial pressure.
When rent, mortgage payments, council tax, food, energy bills and debt repayments are rising, long-term saving can feel out of reach. For someone already working extra hours to stay afloat, increasing pension contributions may simply not feel realistic.
This is where the pensions debate connects directly with the cost-of-living crisis in Scotland. Rising costs are not only making it harder for people to save for retirement; they may also push some people to consider using existing savings pots earlier than planned.
The Pensions Commission warned that, on current trends, around three in 10 private pension pots are accessed at the earliest possible opportunity, while half of all pots are taken out in full. Nearly half of these are spent on large expenses such as a car, holiday or home renovations.
For people under serious financial pressure, the temptation to use long-term savings to deal with short-term problems can be strong. But it can come with consequences.
Should you use a pension pot to deal with debt?
Using pension savings to pay off debt may seem like a way to get breathing space, especially for those old enough to access some pension funds. But it is not a decision to rush.
Taking money from a pension could leave you with less income in retirement. It may also affect tax, benefits, future financial security and the suitability of some debt solutions.
This is especially important if you are already struggling with repayments. A pension withdrawal might reduce one pressure today but create new problems later.
What to do if debt is stopping you from saving
If debt repayments are making it impossible to save, the first step is to understand the full picture. That means looking at:
- Your income, including wages, benefits and pension income
- Essential living costs
- Priority bills such as rent, mortgage, council tax and energy
- Unsecured debts, including loans, credit cards, overdrafts and catalogues
- Whether your current repayments are affordable
For people in Scotland, there may be formal debt solutions available depending on their circumstances. These can include the Debt Arrangement Scheme (DAS), Protected Trust Deeds, Sequestration, or other options.
A Protected Trust Deed is not suitable for everyone, but for some people in Scotland it can help make unsecured debt repayments more manageable and may write off unaffordable unsecured debt after successful completion.
Saving for tomorrow should not mean ignoring today
The Pensions Commission’s findings show that Britain faces a serious long-term savings challenge. But in Scotland, the day-to-day reality for many people is more immediate: wages are being stretched, bills are rising, and extra hours are becoming necessary just to keep up.
That is why conversations about retirement saving cannot be separated from conversations about debt and affordability.
If you are struggling to save because debt repayments are taking up too much of your income, it may be time to get advice. Understanding your options could help you regain control of today’s finances and give you a better chance of planning for the future.
If you live in Scotland and are worried about debt, Trust Deed Scotland can help you understand your options. You can check whether a Protected Trust Deed or another Scottish debt solution may be suitable for your circumstances.
Use our Wizard tool to get started or give us a call on 0141 221 0999. You can also chat to an experienced debt adviser using our WhatsApp service.