More than 15 million people in the UK are not saving enough for retirement, according to a new report by the Pensions Commission. The figure could rise to 19 million without urgent action, leaving many with little choice but to work longer.
The crisis is particularly acute among low- to middle-earners and the self-employed, with only 4% of the latter group contributing to a pension. While auto-enrolment has brought millions into the system, about half of employees are only putting in the minimum required – 8% of total earnings split between employee and employer.
A stark gender gap persists, with women approaching retirement holding just half the private pension wealth of men. The commission is calling for a 'renewed national settlement' to address these systemic failings.
Financial journalist Elizabeth Anderson said many people find pensions 'complicated and inaccessible', despite them being 'just a savings pot'. The shift from defined benefit to defined contribution schemes has left individuals reliant on what they and their employers put in, with investment growth.
Stagnant wages and rising housing costs have squeezed household budgets, leaving little surplus for pension top-ups. With the state pension at £241.30 a week, private savings are vital. Paul Lewis of BBC Radio 4's Money Box described auto-enrolment as 'a great idea' but noted minimum contributions are set for employer affordability, not adequate retirement income.
