UK Finance Daily: Pensions, Debt Warnings & Job Cuts

From a radical proposal to scrap the state pension entirely to fresh warnings from the IMF about Britain's ballooning debt, Wednesday 23 September was a busy day for UK finance news. Here are the stories that matter most to your financial future — and what you should be thinking about right now.

Reform-Linked Thinktank Calls for State Pension Abolition

The Centre for a Better Britain (CFABB), a thinktank with close ties to Reform UK, has published a report calling for the state pension to be abolished altogether — alongside £75 billion worth of tax cuts, including the scrapping of inheritance tax and capital gains tax. The report was formally launched at a private event with City executives on Wednesday and is expected to influence Reform's platform ahead of the next general election.

For most UK adults, the state pension is the bedrock of retirement income. The full new state pension is currently worth around £11,500 a year — not a fortune, but for millions of retirees it is the difference between getting by and genuine hardship. If a future Reform government were to follow through on such a proposal, anyone currently in their 30s, 40s or 50s could find themselves facing retirement without the safety net they have been paying National Insurance contributions towards for their entire working lives.

The report also proposes Trump-style investment accounts offering £1,000 to newborns and weaker rules for UK banks — a package that critics have described as a high-risk gamble with public finances. Whether or not these ideas gain traction, the debate is a timely reminder to review your own retirement planning. Our guide to how pensions work is a good starting point, and if you have multiple pension pots from different employers, our pension consolidation guide could help you get a clearer picture of where you stand.

IMF Warns UK Over Spiralling Debt Costs

The International Monetary Fund has warned both the UK and the United States to take urgent action on their growing debt burdens. IMF managing director Kristalina Georgieva told the BBC that economic shocks — including higher energy prices driven by the ongoing Middle East conflict and the accelerating costs of climate change — had pushed debt levels up "like a staircase not to heaven." The warning comes just weeks ahead of the UK's next Budget, where the Chancellor will face difficult choices about spending and borrowing.

For everyday consumers, rising government debt costs matter because they feed through into higher interest rates across the economy. When the government has to pay more to borrow, it puts upward pressure on mortgage rates, business loans, and the cost of credit more broadly. The BBC also reported that slower growth is expected, which could squeeze wages and employment in the months ahead.

The Budget will be a key moment to watch. Tax rises, spending cuts, or changes to benefits could all affect household finances directly. Now is a sensible time to ensure your financial plan is resilient to a range of outcomes — whether that means building up an emergency fund, reviewing your mortgage deal, or checking your pension contributions are on track.

Legal & General to Cut 1,000 Jobs by Mid-2027

Legal & General, one of the UK's largest insurance and pensions firms, has announced plans to cut around 1,000 jobs — roughly a tenth of its entire workforce — by the middle of next year. The cuts will initially be offered on a voluntary redundancy basis, but the company has warned that compulsory redundancies could follow depending on the level of take-up. Chief executive António Simões, who took over in January 2024, described the move as part of efforts to build a "leaner organisation."

If you are an L&G employee, the immediate priority is to understand your redundancy rights. Statutory redundancy pay is calculated based on your age and length of service, but many large employers offer enhanced packages — so check your employment contract carefully and consider taking independent financial or legal advice before signing anything. It's also worth reviewing your workplace pension arrangements, particularly if you have a pension through L&G itself, to make sure your savings are unaffected by the restructuring.

More broadly, the L&G announcement is a reminder of how quickly the employment landscape can shift — even at established, blue-chip firms. If you don't already have income protection insurance in place, now is a good time to consider it. Our life insurance guide covers the protection products that can help safeguard your income if the unexpected happens.

Cost of Living Crisis Keeping Unhappy Couples Together

New ONS figures show that the average marriage ending in divorce in England and Wales in 2025 lasted 13 years — the longest since records began in 1963. Divorce lawyers say financial pressures are a key factor, with many couples choosing to stay together because they simply cannot afford to separate. Running two households, legal fees, and dividing assets during a period of high living costs is proving too daunting for many.

The financial implications of divorce are significant and often underestimated. Beyond legal costs, separating couples must navigate the division of pensions — which are often the largest asset after the family home — as well as mortgages, savings, and ongoing childcare costs. Pension sharing orders, for example, can be complex and require specialist advice to ensure both parties receive a fair outcome.

If you are staying in a property with a former or soon-to-be former partner due to financial constraints, it's worth taking stock of your mortgage arrangements. Whether you are looking to take over a joint mortgage solo, remortgage to release equity, or understand your options as a first-time buyer starting fresh, our first-time buyer mortgage guide and our broader mortgage resources can help you navigate the next steps.

The Bottom Line

Yesterday's news painted a picture of an economy under pressure — from political proposals that could reshape retirement as we know it, to IMF warnings about debt and slower growth, to job cuts at one of the UK's biggest financial institutions. Here's what you should consider doing:

• Review your pension contributions. Don't assume the state pension will always be there in its current form. Building your own private pension pot — and keeping track of it — is more important than ever. See our guide to how pensions work for a plain-English overview.
• Check your mortgage rate. With debt costs rising and the Budget approaching, now is a good time to review whether your current deal still works for you. A fee-free adviser can compare the whole market on your behalf.
• Make sure you have protection in place. Redundancy can happen at any employer. Income protection and life insurance are your financial safety net if the worst happens. Our life insurance guide explains the options.
• Get advice before major life decisions. Whether it's divorce, retirement, or a job change, an FCA-regulated financial adviser can help you avoid costly mistakes at pivotal moments.