At least 15 million Britons are not saving enough for retirement, according to an interim report from the Pensions Commission. The government-backed body warned that this figure could rise to 19 million without action, leaving millions facing a "severe cliff-edge" when they stop working.
Key Findings
The commission, revived by Prime Minister Keir Starmer last year, found that 45% of working-age adults do not save into a pension at all, despite nearly half being employed. Low and middle earners are most at risk, with many relying solely on minimum auto-enrolment contributions.
Auto-enrolment requires employers to place staff in a pension scheme, with a minimum total contribution of 8% of earnings (5% from the worker, 3% from the employer). However, the report highlights that this may be insufficient.
Self-Employed and Gender Gap
Only 4% of wholly self-employed workers are saving for retirement, with even lower rates among younger self-employed individuals. Additionally, women approaching retirement have half the private pension savings of men: a median of £81,000 compared to £156,000.
Around 30% of private pension pots are accessed at the earliest opportunity, with nearly half withdrawn in full. Much of this money is spent on large expenses like cars, holidays, or renovations.
Call for Reform
Jeannie Drake, chair of the commission, called for a "renewed national settlement on pensions" to ensure adequate retirement income. The final report, due next year, will propose policy changes.
Pensions Minister Torsten Bell said: "Britain has got back into the pension saving habit, but the job is only half done. Tomorrow's pensioners are still on track to be poorer than today's."
