Pensions warning issued to 15 million Britains over ‘undersaving’ – check if you’re affected
An estimated 15 million people across the UK currently have insufficient savings for retirement, a stark warning has been issued by the Pensions Commission.
The body urgently called for a new “national solution” to address the growing crisis in pension services.
In its interim report on the state of retirement savings, the commission highlighted that key groups face a “serious cliff edge” when they stop working.
It is stated that women, low- and middle-income earners and the self-employed are at risk of financial insecurity in later life.
The Commission warns that unless decisive action is taken, the number of individuals inadequately prepared for retirement could rise to 19 million.
This widespread undersaving also risks millions more becoming dependent on government support during retirement.
Its interim report said: “The forces reshaping our society – longer retirements, slower growth and falling home ownership – demand a renewed national consensus on pensions.”
The report continued as follows: “The share of our population over the age of 65 is projected to reach 28% in 2075, from 19% today.
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“The number of people aged 75 and over is expected to double between 2025 and 2075: an increase of six million.
“State pension age increases and slowing life expectancy increases have kept the elderly dependency ratio low over the past 20 years, but over the next decade the ratio is expected to reach three retirees for every 10 working-age adults and four retirees for every 10 adults by the 2070s.”
The report added: “Spending on pensioner benefits (including state pension) is expected to rise from around 6% of GDP in 2024-25 to around 9% in the early 2070s.”
The commission, established by the Government in July 2025, aims to find solutions to savings problems that have accumulated over decades.
Many people do not have salary-based pensions that they can rely on in retirement; because these have become less common and instead risk how much money they get depending on factors such as contributions and the performance of the funds.
Some groups of people, such as those earning less than £10,000 in a job and those who are self-employed, are also excluded from automatic enrollment in a workplace pension.
Only 4% (one in 25) of fully self-employed workers are saving for retirement, the commission said.
The report said: “Given the lack of automatic enrollment for nearly four million self-employed workers in the UK, the inertia-based retirement savings system is failing to provide for many of those who need it most.”
The report added: “Although the share of women holding private pension wealth has increased significantly, the average uncrystallised private pension wealth in the late 50s was £156,000 for men and £81,000 for women (48% less) between 2020 and 2022.
“Gaps in pension participation are also of particular concern for carers, disabled people and some ethnic minorities.”
Working longer and reducing labor market inactivity, especially for people in their 50s, is a necessary part of ensuring adequate income in retirement, the report said.
He added: “But longer working lives may only be part of the solution and are easier for some people than others.”
There are also concerns about people depleting their retirement funds too early.
The Commission said that based on current trends, around three in 10 private pension pots are being accessed at the earliest possible opportunity.
A final report with recommendations will be published in early 2027, and the Commission said it would like to hear from interested parties.
Pensions commissioner Baroness Jeannie Drake said achieving a renewed national solution on pensions “will require clarity of purpose, but it also presents a moment of opportunity to renew a social contract that inspires confidence across the country”.
He said: “The recommendations we make in our final report will address the need to secure adequate income in later life and a pension system fit for decades to come.”
Automatic enrollment in the pension system has enabled millions of workers to tap into retirement savings; Nine out of 10 eligible employees saved within the scope of workplace retirement.
But there are concerns that many people still do not save enough for a decent retirement.
The report said: “There are good reasons to be concerned about the statutory floor level for auto-enrolment contributions becoming the norm rather than the minimum.”
Pensions Minister Torsten Bell said: “Britain is back to retirement savings, but only half the job is done – tomorrow’s retirees are still on track to be poorer than today’s.
“The Pensions Commission makes clear the extent of the problem: not enough people are saving for retirement and many of them are not saving enough.”
Director of long-term savings policy at the Association of British Insurers (ABI), Dr. Yvonne Braun said: “The report makes a strong case for a new national solution for pensions.
“Automated enrollment is a solid foundation, but it must evolve to meet the scale of the challenges ahead.
“We and our members stand ready to work with the Commission to deepen savings, expand coverage and support better decisions in retirement, so everyone can look forward to greater financial security in later life.”
Which? Rocio Concha, her company’s director of policy and advocacy, said: “The report rightly highlights that large numbers of working people are predicted to reach later life without sufficient savings, and that women, carers, the self-employed and many ethnic minority groups continue to face structural barriers.
“It is encouraging that there is also a strong focus on how to support people to use their retirement savings throughout retirement.”
Julian Mund, chief executive of Pensions UK, said: “Pensions UK welcomes the scope and ambitiousness of this report and shares the Commission’s view that we need a new national solution on pensions.
“The evidence presented in the report clearly strengthens the case for greater retirement savings over longer working lives, alongside systemic change delivering sustainable incomes, building on welcome reforms to the Pension Schemes Act.
“We look forward to working with the Government to explore how this diagnosis can be translated into a practical roadmap for reform, long before future generations fall behind the retirement incomes they expect and deserve.”
TUC general secretary Paul Nowak said: “Workers deserve a pension system that ensures retirement poverty and allows them to maintain their standard of living.
“Although millions of people now receive workplace pensions, the vast majority of low- and middle-income earners are not going into a decent retirement, with women, black and ethnic minority workers, disabled workers and those working in the gig economy being most at risk.
“The commission now needs to develop a bold plan to fix this, including higher employer contributions and a fair deal for those currently missing out.”
