Copy article

Britain is undersaving for retirement warns Pensions Commission

ended 19. May 2026

 The Pensions Commission has today (19 May) published its interim report on the state of retirement saving in the UK. The main takeaway is that many people are not saving enough for retirement, particularly among low and middle earners, the self‑employed and women, and points to the need for the system to evolve to meet modern working lives. More info below. Any thoughts as to why people are undersaving and how to fix it, send them across ASAP as writing this story NOW. 

There are currently 15 million people under saving for retirement which could reach 19 million without action, leaving large groups across the UK facing a severe cliff-edge when they retire, according to a new report from the Pensions Commission.

Set up by the Government in July 2025, the Commission aims to address a savings challenge that has been building for decades, examining why tomorrow’s retirees’ risk being worse off than today’s and making recommendations to reverse this.

This follows the success of the 2002 to 2006 Commission which built a consensus for the roll-out of Automatic Enrolment into pension saving, resulting in 89% of eligible employees now saving into their pensions, up from 55% in 2012.

Its findings include:

  • Low and middle earners are most at risk, with around half saving only at minimum Automatic Enrolment levels with little else to fall back on.
  • 45% of working-age adults - around 18 million people - are not saving into a pension at all, despite nearly half of them being in work.
  • Where employers are contributing about the statutory minimum this is largely benefiting higher earners.
  • Just 4% - one in 25 - of wholly self-employed workers are saving for retirement, and it’s even lower among younger self-employed people.
  • On current trends around 3 in 10 private pension pots are accessed at the earliest possible opportunity with half of all pots taken out in full. Nearly half of these are spent on large expenses like a car, holiday or renovations.

The Commission examined why tomorrow’s retirees are on track to be poorer than today’s with too many working age adults are saving nothing at all into a pension. A final report with recommendations will follow in early 2027.

6 responses from the Newspage community

Copy all

Copy

Editor
Scott Gallacher
Director at Rowley Turton
Despite the obvious success of Auto-Enrolment, I’m not particularly surprised by the conclusions of this report. Retirement can seem a very long way away, and people naturally tend to prioritise present-day financial pressures and spending over their future selves. Add in the cost of living crisis, and you can see why many people are effectively sleepwalking towards a retirement cliff edge, where they may face either a significant drop in income or having to work much longer than planned. If we are serious about improving retirement outcomes, Auto-Enrolment contribution levels will ultimately need to increase over time.
Copy

Editor
Graham Nicoll
Financial Planner, Chartered FCSI at NCL Wealth Partners
The Pensions Commission report highlights a growing retirement crisis in the UK, particularly for low and middle earners, women and the self-employed. Too many people are either not saving at all or relying solely on minimum auto-enrolment contributions, which are unlikely to deliver the retirement lifestyle they expect. Business owners are also highly susceptible as many prioritise reinvesting back into the business over retirement planning. I am meeting a business owner this week who is early 60s with a pension worth just £70,000 despite years of strong earnings, because retirement planning was never prioritised. In doing so, he has also missed significant tax-efficient opportunities available through pension contributions and the chance to de-risk his business The challenge is not just affordability, but education, engagement and long-term planning.
Copy

Editor
Philly Ponniah
Chartered Wealth Manager and Financial Coach at Philly Financial
Automatic enrolment got more people into pensions but created an illusion that the minimum is enough. For low and middle earners—especially women balancing caregiving or self-employed workers with unpredictable income—minimums won’t deliver a comfortable retirement. People manage today’s costs first, so retirement feels too far away to prioritise. There’s also confusion about what pensions are for. Many access pots at the first opportunity because they’ve never connected saving with their future lifestyle. If your pension feels abstract, it’s easier to spend on a holiday than protect for later. The system hasn’t kept up with modern working lives; auto-enrolment excludes many part-time and younger workers, disproportionately impacting women. Fixing this needs more than telling people to save harder. We need better illustrations of what contributions compound to, and clearer education around what retirement actually costs. When people feel overwhelmed, they often do nothing at all.
Copy

Editor
Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
The reality is we don’t have a pensions crisis coming — we’re already in one.
Auto-enrolment has been a success, but for many people it’s simply not enough. Minimum contributions create the illusion of progress, but they won’t deliver the retirement people expect — particularly for low and middle earners, the self-employed and those with broken career paths.

The challenge is behavioural as much as financial. People prioritise today over tomorrow, especially with rising living costs, and pensions feel distant and complex. Add in the fact that many access pots early and spend them, and the problem compounds.

Fixing this will require a combination of higher contribution rates, bringing the self-employed into the system, and much better education and engagement. Without that, millions risk reaching retirement with a significant shortfall and a sharp drop in living standards
Copy

Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
For some, retirement is sadly unaffordable. There's dual forces at play here. The cost of living squeezes the ability to contribute into a pension as well as meaning you need a larger fund for retirement. Even with making the most logical choices, some people will be depending entirely on the state pension for most of their income in retirement. Reducing the cost of living is the best approach the government can take to fix this for the long term.
Copy

Editor
Ben Perks
Managing Director at Orchard Financial Advisers
This cost of living crisis is going to impact people now and in many years to come. The harsh reality is, if people are struggle to fund life today, they can’t think about tomorrow. Families just don’t have the disposable income to put into private pensions.