Britain is facing a 'tsunami' of pensioner poverty over the coming decades unless the pension saving system is overhauled, according to Work and Pensions Secretary Liz Kendall. Speaking at the launch of a major independent commission on pensions, Kendall warned that growing numbers of people will struggle to make ends meet in old age.
Kendall highlighted that almost half of the working-age population is not saving anything for retirement, and those who are saving are not putting away enough. The commission, led by Jeannie Drake, Sir Ian Cheshire, and economist Nick Pearce, will consult business and union groups to build a consensus. Proposals may include lowering the auto-enrolment age from 22 and raising contribution rates from 8%.
The commission will also consider 'sidecar savings', allowing emergency access to a portion of pension savings. Kendall confirmed a statutory review of the state pension age, currently 66 and set to rise to 67 between 2026 and 2028. However, the triple lock guarantee, which uprates the state pension by the highest of inflation, wages, or 2.5%, is out of scope.
Kendall acknowledged that high housing costs are a major driver of pensioner poverty, noting that many young people cannot get on the housing ladder and face high rents or mortgages in retirement. The commission will not address housing policy, but Kendall pointed to Labour's housebuilding plans.
Business groups gave a cautious welcome to the commission but warned against piling costs on employers. Kate Nicholls of UK Hospitality stressed the need for a partnership approach to balance reform with business viability. Kendall also referenced Labour's U-turn on disability benefit cuts, insisting welfare reform remains necessary despite recent challenges.
