The Pensions Commission has issued a stark warning that approximately 15 million people in the UK are under-saving for their retirement, calling for a fresh "national settlement" on pensions to address the growing crisis.
Interim report highlights severe cliff-edge risk
In its interim report on the state of retirement saving, the commission cautioned that significant groups of people could face a severe financial cliff-edge when they retire. Women, low and middle earners, and the self-employed are particularly at risk, with the number of under-savers potentially reaching 19 million without intervention. Millions more may become reliant on state support in later life.
The report stated: "The forces reshaping our society – longer retirements, slower growth, and falling home ownership – demand a renewed national settlement on pensions." It highlighted that the share of the population over 65 is projected to reach 28% by 2075, up from 19% today, while the number of people aged 75 or over could double between 2025 and 2075 – a rise of six million.
Demographic pressures and spending projections
State pension age increases and slowing life expectancy growth have tempered the old-age dependency ratio over the past 20 years, but the next decade is expected to see three pensioners for every 10 working-age adults, rising to four by the 2070s. Spending on pensioner benefits, including the state pension, is projected to grow from around 6% of GDP in 2024-25 to about 9% by the early 2070s.
Established by the Government in July 2025, the commission aims to tackle savings challenges that have been building for decades. Many workers no longer have salary-based pensions and instead bear investment risk through defined contribution schemes. Some groups are excluded from automatic enrolment into workplace pensions, including those earning below the £10,000 threshold and the self-employed. The commission noted that only 4% of wholly self-employed workers are saving for retirement.
Gender and coverage gaps
"Given there is no automatic enrolment for the approximately four million self-employed workers in the UK, the inertia-based pension-saving system does not provide for many who need it most," the report said. It added that while the share of women with private pension wealth has grown, median uncrystallised private pension wealth for those in their late 50s was £156,000 for men compared to £81,000 for women – a 48% gap. Pension participation gaps are also a concern for carers, people with disabilities, and some ethnic minorities.
Call for longer working lives and prudent withdrawals
The report emphasised that working longer, particularly reducing labour market inactivity among people in their 50s, is necessary for adequate retirement incomes, but "longer working lives can only be part of the answer." There are also worries about individuals depleting their pension pots too early, with about three in 10 private pension pots accessed at the earliest opportunity.
A final report with recommendations is expected in early 2027, and the commission is seeking views from interested parties. Pensions commissioner Baroness Jeannie Drake said achieving a renewed national settlement "will require clarity of purpose, but it also offers a moment of opportunity; to renew a social contract that commands confidence across the country."
Reactions from stakeholders
Minister for pensions Torsten Bell commented: "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." Dr Yvonne Braun of the Association of British Insurers said the report makes a powerful case for a new national settlement, while Rocio Concha of Which? highlighted structural barriers facing women, carers, and ethnic minorities.
Julian Mund of Pensions UK welcomed the report's ambition, and TUC general secretary Paul Nowak called for higher employer contributions and a fair deal for those missing out. Nausicaa Delfas of the Pensions Regulator expressed commitment to creating a system delivering sustainable income in retirement.
Sir Steve Webb, former Liberal Democrat pensions minister, criticised a "wasted decade" in pensions policy, urging the commission to "grasp the nettle of higher contributions." Caroline Abrahams of Age UK stressed the need for better integration of state and private pensions to prevent low earners from falling through the cracks. Patrick Heath-Lay of People's Pension called for consensus-building among stakeholders.
