"The Pensions Commission sets out clearly the scale of the challenge: not enough people are saving for retirement, and many of those that are aren't saving enough"
- Torsten Bell MP - Minister for Pensions
The UK's retirement savings gap could affect as many as 19 million people without government intervention, according to an interim report published by the Pensions Commission today.
The report sets out the key challenges facing the current retirement saving system and signals where the Commission will focus its work ahead of a final set of recommendations due in early 2027. At present, 15 million people are undersaving for retirement, with low and middle earners, the self-employed and women identified as most at risk.
The scale of the problem is stark. Around 45% of working-age adults, roughly 18 million people, are not saving into a pension at all, despite nearly half of them being in work. Among the wholly self-employed, just 4% are actively saving for retirement, with the figure falling even lower for younger self-employed workers. Meanwhile, around half of those in employment are saving only at minimum automatic enrolment levels, with little additional provision to fall back on.
The report also raises concerns about how pots are being used. On current trends, around 3 in 10 private pension pots are accessed at the earliest possible opportunity, with half taken out in full. Nearly half of those withdrawals are spent on large one-off expenses such as a car, holiday or home renovations.
Where employer contributions are concerned, the Commission found that statutory minimum contributions largely benefit higher earners, leaving those on lower incomes with less support from their workplace.
Set up by the government in July 2025, the Commission was established to address a savings shortfall that had been building for decades. It follows the 2002 to 2006 Turner Commission, which built the consensus for automatic enrolment and helped push the proportion of eligible employees saving into a pension from 55% in 2012 to 89% today.
Baroness Jeannie Drake, Pensions Commissioner, said: "Over the past two decades, since the Turner Commission, there is no doubt pensions reform can be described as a success.
"Yet the second Pensions Commission is looking forward and seeing many people not saving enough and millions not saving at all. This demands a renewed national settlement on pensions. Achieving this will require clarity of purpose, but it also offers a moment of opportunity to renew a social contract that commands confidence across the country."
"The recommendations we present in our final report will address the need to secure adequate income in later life and a pension system that is fit for decades to come. The Commission will set out the course to improving future outcomes whilst ensuring the system is fair and sustainable within and between generations."
Torsten Bell MP, Minister for Pensions, acknowledged the progress made while pointing to the work still ahead. "Britain has got back into the pension saving habit, but the job is only half done with tomorrow's pensioners still on track to be poorer than today's," he said.
"The Pensions Commission sets out clearly the scale of the challenge: not enough people are saving for retirement, and many of those that are aren't saving enough. The Commission warns that without action, millions more people could be at risk of becoming reliant on state support in retirement.
"It adds that there is much for public policy to do to shape the future of pensions, whilst maintaining the broad political consensus pensions have had since the Turner Commission in the 2000s. The Commission is clear that change must happen in the right way, with any recommendations for change implemented gradually. The Government has ruled out any changes to Automatic Enrolment contributions this Parliament."
Julian Mund, chief executive of Pensions UK, welcomed the report's scope. "Pensions UK welcomes the breadth and ambition of this report, and shares the Commission's view that we need a new national settlement on pensions," he said.
"Evidence presented in the report clearly strengthens the case for more pension saving over longer working lives, alongside systemic change that delivers sustainable incomes, building on welcome reforms in the Pension Schemes Act. We look forward to working with the Government to explore how that diagnosis can be turned into a practical roadmap for reform, well before the next generation falls short of the retirement incomes they expect and deserve."
