The future of the state pension is in doubt as today’s UK net migration figures expose a “demographic drag” to the retirement system going forward, analysts warn.
Figures from the Office for National Statistics (ONS) found that net migration to the United Kingdom has fallen by nearly half, reaching 171,000 in the year ending December 2025.
The statistics body confirmed this represents a 48 per cent decline compared to the previous year, marking the lowest level recorded since the beginning of 2021.
However, economists have warned that falling net migration will result in fewer working-age people contributing to the economy, while increasing the number of retirees.
Falling migration could put pressure on the state pension, analysts warn
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Without significant reform, analysts have claimed the long-term sustainability of the state pension is in question, with the triple lock being a particular point of contention.
Thanks to the triple lock-uprate mechanism, state pension payment rates rise every year by the highest of either inflation, average wage growth, or 2.5 per cent.
The Office for Budget Responsibility (OBR) has previously warned that the state pension is on track to be £10billion more expensive a year than initially expected.
Last month, separate ONS projections painted a stark picture of Britain’s demographic future, with deaths set to exceed births from mid-2026 onwards.
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What is the state of net migration in Britain?
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By 2034, the gap will have widened to 450,000 more deaths than births, fundamentally altering how the population grows.
The UK is forecast to reach 71 million people within the next decade, but this expansion will depend entirely on inward migration rather than natural population increase.
Maike Currie, the vice president of Personal Finance at PensionBee, said: “The UK’s demographic dividend is turning into a deepening demographic drag.
“From mid-2026, deaths will outnumber births, leaving 450,000 more deaths than births by 2034. Population growth now relies entirely on migration.
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“The age shift is stark: between mid-2024 and mid-2034, the number of people of pensionable age is set to rise by 1.8 million to 14.2 million.
“That’s around one in five of the population, taking into account the planned increase in the state pension age to 67.
“Meanwhile, over the same period, the number of children is expected to fall from 12.6 million to 11 million – making up just 15.5% of the population by mid-2034.
“For the pension system, this means fewer future workers supporting more retirees. With earlier figures showing a third of those leaving the UK, aged 16 to 34, the pension system faces a double hit: fewer contributors and more retirees, putting real strain on the state pension and long-term investment flows.”