A government-backed report has revealed that at least 15 million people in the UK are not saving enough for retirement, with the figure potentially rising to 19 million without intervention. The Pensions Commission, revived by Prime Minister Keir Starmer last year, warned that large groups face a 'severe cliff-edge' when they stop working.
The commission found that 45% of working-age adults are not saving into a pension at all, despite nearly half being in employment. Low and middle earners are most at risk, with around half relying on minimum automatic enrolment contributions of 8% of earnings (5% from the worker, 3% from the employer). Only 4% of self-employed workers are saving for retirement, with younger self-employed individuals saving even less.
The report highlighted a significant gender gap, with women approaching retirement having median private pension savings of £81,000, compared to £156,000 for men. It also noted that about 30% of private pension pots are accessed at the earliest opportunity, with half of those cashed out entirely, often spent on cars, holidays, or renovations.
Jeannie Drake, who chaired the original commission under Tony Blair, called for a 'renewed national settlement on pensions' to secure adequate income in later life. Pensions Minister Torsten Bell said that while Britain has regained the savings habit, 'the job is only half done'. The commission is set to publish final recommendations next year.
