Go back to insightsPensions Commission Mk II: a warning on retirement saving
The newly established Pensions Commission has released an interim report that highlights potential risks for future retirement planning.
The original Pensions Commission, set up in 2002, spent four years developing a series of key recommendations, including:
- Introducing a low-cost workplace pension scheme with automatic enrolment;
- Reforming the State Pension to reduce reliance on means testing; and
- Gradually increasing the State Pension age (SPA) to reflect longer life expectancy.
These proposals were largely implemented and have since transformed retirement savings for millions.
In 2025, the government launched a second Pensions Commission to assess how the UK pension system should evolve in a very different economic and employment landscape compared with the early 2000s. As with many major reviews, it has been suggested that the Commission provides a degree of separation for addressing difficult policy decisions around costs and benefits.
The Commission’s 190-page interim report, published ahead of final recommendations expected next year, highlights several key findings:
- The triple lock has helped raise the full new State Pension to around 30% of median full-time earnings, a target set by the original Commission, suggesting future increases may be more modest.
- While the State Pension provides a vital foundation, greater reliance will need to be placed on private, earnings-related pension savings to achieve a comfortable retirement income.
- Although the UK’s SPA is not unusually low by international standards, people in the UK tend to leave the workforce earlier than in many comparable countries.
- Around 43% of the working-age population, approximately 15 million people, are currently under-saving for retirement, based on updated adequacy measures. Those in “Generation X” (born 1965–1980) are expected to face the greatest shortfall, a trend supported by other recent studies.
- Pension participation among the self-employed remains particularly low, with only 17% contributing to a pension, and just 4% among those relying solely on self-employment income.
The Commission is widely expected to recommend a gradual increase in minimum auto-enrolment contribution rates in 2027. In light of this, individuals may wish to consider increasing their own pension contributions now to avoid falling into the under-saving category.
Important information
The value of investments, and any income from them, can fall as well as rise, and you may not get back the amount originally invested.
5th June 2026