Britain faces a deepening retirement savings shortfall, with the UK Pensions Commission warning in its interim report that 15 million people are not putting enough aside, a figure the commission says could climb to 19 million if policy remains unchanged.
The report singles out low and middle earners, the self-employed and women as the cohorts most exposed, and argues the pensions system must be redesigned around modern working patterns.
Set up by the government in July 2025, the commission is examining why tomorrow's retirees are tracking poorer than today's. A final report carrying its recommendations is due in early 2027.
It is the second such body in two decades, following the 2002 to 2006 commission whose work paved the way for Automatic Enrolment. That policy has lifted the share of eligible employees saving into a workplace pension to 89%, up from 55% in 2012.
The interim findings, however, show how much ground is still being lost. Some 45% of working-age adults – around 18 million people – are not saving into a pension at all, even though nearly half of them are in work.
Roughly half of low and middle earners save only at minimum Automatic Enrolment levels, while just 4% of wholly self-employed workers are setting money aside for retirement, with even fewer doing so among younger cohorts. Employer contributions pegged to the statutory minimum, the commission added, largely benefit higher earners.
Drawdown behaviour is also under scrutiny. Around 3 in 10 private pension pots are accessed at the earliest opportunity and half are withdrawn in full, with nearly half of those withdrawals spent on cars, holidays or home renovations.
Pensions Commissioner Baroness Jeannie Drake said reform since the Turner Commission had been a success, but that the latest review was uncovering large gaps.
"This demands a renewed national settlement on pensions," she said, adding that the recommendations would address adequate retirement income and long-term system design.
Pensions Minister Torsten Bell said Britain had returned to the pension saving habit but that "the job is only half done," with future pensioners still on track to be worse off than current ones. The government has ruled out further changes to Automatic Enrolment contributions during this Parliament.
The insurance industry has been positioning itself around the same long-term savings agenda.
In January, the ABI created a new Pension Insurance and Investment Board, chaired by Just Group chief executive David Richardson, with oversight of DB pensions policy, annuity investment and the bulk purchase annuity market, alongside the industry's £100bn UK productive assets investment commitment.
Dr Yvonne Braun, director of long-term savings policy at the ABI, described Automatic Enrolment as "a sturdy foundation" that must evolve to meet the scale of the challenge. She said the ABI and its members would work with the commission to extend coverage and support retirement decision-making.
The commission has also opened a call for views, and will gather industry and public input over the next year before publishing its final recommendations in early 2027.
