London, 17 August 2026: 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
For many parents, financial support doesn’t end when their children leave school or university. Soaring housing costs and a difficult labour market mean 3.6 million adults aged 20 to 34 now live with their parents, while many more rely on ongoing financial help with rent, deposits or everyday living costs.
For some households, an adult child earning and contributing to bills can strengthen the family’s finances. But for many others, the flow of support runs in the opposite direction. Parents who might otherwise be increasing pension contributions or preserving retirement savings are instead using their income and capital to support the next generation.
This creates a blind spot in how retirement adequacy is often measured. A household may appear financially secure on paper, yet that security depends on one generation continuing to support another. Equally, a parent with an apparently healthy pension may be quietly compromising their own retirement by reducing contributions or drawing on savings to help an adult child.
Maike Currie, VP Personal Finance, PensionBee comments: “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
While the family home tends to dominate divorce negotiations, pensions, often the second most valuable asset a couple owns, can be overlooked. Research cited in the Pensions Adequacy report highlights that more than a third of divorcees did not know the value of their own pension when they separated, while only 11% of those with an undrawn pension made arrangements to share it.
According to the report, while divorced men appear to retain larger pension pots after separation, divorced women consistently hold less pension wealth than their married counterparts. The gap widens in the years before retirement, reflecting the cumulative impact of lower earnings, career breaks and caring responsibilities, with many women appearing to draw on their pensions early simply to make ends meet.
Maike Currie comments: “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
Retirement adequacy is shaped not only by what people earn, but also by who they care for. Whether it’s raising children, supporting an aging parent or juggling both at the same time, caring responsibilities can interrupt careers, reduce earnings and weaken long-term pension saving. The result is that periods of unpaid care have become one of the biggest drivers of the gender pension gap as caring responsibilities are more frequently borne by women.
The Pensions Adequacy report argues that better support for carers could help reduce these inequalities. Options include state-funded pension contributions during periods of unpaid care, pension top-ups linked to recognised caring responsibilities, or measures to help maintain pension saving during extended leave. While each would involve costs and practical challenges, the report concludes they could help protect retirement outcomes for people undertaking socially valuable but unpaid work.
Maike Currie comments: “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.”
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