Millions at Risk of Under-Saving for Retirement, Pensions Commission Warns
Interim report highlights growing concerns around retirement preparedness, pension engagement and long-term financial security
An interim report from the Pensions Commission has warned that millions of people across the UK are not saving enough for retirement, leaving many facing what has been described as a potential “severe cliff-edge” later in life.
This article is based on reporting by Today’s Wills and Probate.
15 million people under-saving for retirement
The interim report estimates that around 15 million people are currently under-saving for retirement — a figure which could rise to 19 million without intervention.
According to the Department for Work and Pensions, low and middle earners, women and self-employed workers are among those most at risk.
The report warns that many people could face significant financial difficulty in retirement unless long-term savings habits improve.
The findings form part of the government’s wider programme of pensions reform aimed at helping more people retire with dignity and greater financial security.
Progress has been made — but challenges remain
The latest commission follows the influential work of the original Pensions Commission between 2002 and 2006, which led to the introduction of automatic enrolment into pension saving.
That reform significantly increased pension participation, with 89% of eligible employees now contributing into pensions, compared to 55% in 2012.
However, the report suggests that participation alone is no longer enough.
Many people may technically be saving for retirement — but not saving enough to achieve adequate income later in life.
Who is most at risk?
The report identifies several groups facing particular challenges:
- low and middle income earners;
- self-employed workers;
- women;
- younger workers;
- those relying solely on minimum automatic enrolment contributions.
Nearly half of working-age adults — around 18 million people — are reportedly not saving into a pension at all, despite many being in employment.
Among self-employed workers, pension participation remains especially low, with only 4% currently saving for retirement.
Early access to pensions is also a concern
The report also highlights concerns around how pension savings are being used once accessed.
Among those with private pensions:
- many are accessing pensions at the earliest available opportunity;
- large numbers are withdrawing savings in full;
- funds are often being used for short-term expenses such as cars, holidays or home improvements.
The concern is not only about whether people save enough — but whether savings are preserved to provide sustainable retirement income.
A changing working world requires a modern pensions system
The commission suggests that pension policy must evolve to reflect modern working lives and changing employment patterns.
Baroness Jeannie Drake, Chair of the Pensions Commission, acknowledged the success of earlier reforms but warned that a renewed national approach is now needed.
“The second Pensions Commission is looking forward and seeing many people not saving enough and millions not saving at all. This demands a renewed national settlement on pensions.”
Final recommendations from the commission are expected in 2027.
Government reforms already underway
The government says it is already taking steps to strengthen the pensions landscape through reforms linked to the Pension Schemes Act.
These reforms aim to:
- reduce pension costs;
- improve long-term returns;
- consolidate small pension pots;
- help pension savings work more effectively for savers.
Minister for Pensions Torsten Bell MP warned that while Britain has improved pension participation, “the job is only half done”.
“The Commission warns that without action millions more people could be at risk of becoming reliant on state support in retirement.”
Why this matters for estate planning professionals
Retirement planning increasingly overlaps with wider estate planning, later life advice and financial decision-making.
For wills and estate planning professionals, the report highlights the growing importance of:
- long-term financial planning conversations;
- understanding later-life financial pressures;
- advising clients with increasingly complex retirement circumstances;
- working collaboratively with financial advisers and related professionals.
As people live longer and financial pressures increase, retirement preparedness is likely to become an increasingly important part of wider client planning discussions.
In summary
The Pensions Commission’s interim findings paint a concerning picture for long-term retirement preparedness across the UK.
While pension participation has improved significantly over the past two decades, millions of people remain under-prepared financially for later life.
The challenge now is not simply encouraging people to save — but ensuring they save enough, retain those savings effectively, and can access appropriate support and advice throughout later life planning.