UK Pensions Commission Warns 15 Million Are Undersaving

If you've ever seen pension deductions on a payslip and thought, I'll deal with that later, the Pensions Commission's new report is a reminder that later arrives faster than most of us think. In its interim report published on 19 May, the Commission says 15 million people in the UK are currently undersaving for retirement, and that figure could rise to 19 million if nothing changes. That matters because a pension is not just a pot of money tucked away for old age. It shapes how much security, dignity and independence you may have when work stops. The Commission's warning is blunt: too many people are heading towards retirement with too little, or with nothing at all.

The Commission was set up by the government in July 2025 to look at a problem that has been building for years: why tomorrow's retirees are on course to be worse off than many pensioners today. Its final recommendations are due in early 2027, but this first report sets the scene by spelling out who is missing out and why the present system no longer matches modern working life. There is one piece of good news worth keeping in view. The last major pensions review, often called the Turner Commission, helped bring in automatic enrolment. That is the rule that signs many employees up to a workplace pension unless they opt out. According to the new report, 89% of eligible employees are now saving into a pension, up from 55% in 2012.

**What this means:** automatic enrolment did one big job well, but it did not finish the job. Think of it as a start, not a guarantee. It got millions of people through the door, yet being enrolled is not the same as building a comfortable retirement. The Commission says around half of low and middle earners are saving only at the minimum automatic enrolment level and often have little else to rely on. That is why the report keeps returning to a simple question: not only are you saving, but will it be enough? For many households, especially those juggling rent, childcare and high living costs, the minimum can feel like all they can manage. The result is steady saving on paper, but a weak safety net in real life.

One of the starkest figures in the report is this: 45% of working-age adults, about 18 million people, are not paying into a pension at all. Nearly half of that group are in work. So this is not simply a story about unemployment. It is also a story about jobs that do not pull people into pension saving, working patterns that break contributions, and incomes that leave little room to plan ahead. The Commission says women, lower earners and the self-employed are especially exposed. That fits a pattern many readers will recognise. If your pay is low, your hours vary, or you take time out for caring, pension saving is often the first thing pushed aside. Groups speaking after the report, including Which? and the TUC, also pointed to carers, many ethnic minority workers, disabled workers and people in insecure work as people who face extra barriers.

The self-employed stand out for worrying reasons. The report says only 4% of wholly self-employed workers are saving for retirement, and the rate is even lower among younger self-employed people. If you work for yourself, there is no employer quietly adding money to your pension each month. Saving becomes one more task you have to set up, fund and keep going while managing every other pressure of working life. The report also questions who benefits most from the present rules. Where employers contribute only the statutory minimum, the gains are said to lean towards higher earners. In other words, the system can look equal on paper while still producing unequal results. That is worth pausing on. A pension policy is not only about how many people are included, but whether the people most in need are getting enough.

There is another clue in what happens when people reach their pension pots. The Commission says around three in ten private pension pots are accessed at the earliest possible point, and half of all pots are taken out in full. Nearly half of those full withdrawals are spent on big one-off costs such as a car, a holiday or home improvements. It is easy to read that and slip into blame, but the harder truth is that people do not make pension decisions in a vacuum. If someone has a small pot and urgent costs, taking the money now may feel sensible even if it weakens their later income. The problem, then, is not simply personal choice. It is that many people reach retirement with pots too small to offer real flexibility.

Pensions Commissioner Baroness Jeannie Drake says the country needs a renewed national settlement on pensions, and over the next year the Commission will gather views before publishing its final recommendations in early 2027. A public call for views has opened alongside the report. Torsten Bell, the pensions minister, says Britain has got back into the habit of pension saving, but warned that tomorrow's pensioners are still on track to be poorer than today's and that, without action, more people could end up relying on state support in retirement. The government has ruled out changes to automatic enrolment contribution levels in this Parliament, so any big shift is likely to be gradual. Around the report there is broad support for action, but not complete agreement on what should happen first. Age UK says the State Pension and private pensions need to work better together. The TUC wants higher employer contributions and a fairer deal for workers who miss out. The ABI, Pensions UK, the CBI and The Pensions Regulator all back further reform, while stressing that any new settlement has to be workable over time.

There is also a newer government claim sitting beside this debate. Ministers say the Pension Schemes Act, passed this month, will help 22 million workers and could leave some people up to £29,000 better off by retirement through lower costs, better returns and the automatic consolidation of small pension pots. That is the government's case for reform already under way, and it now sits alongside the Commission's slower, wider review of the whole system. **What to take away from this:** if you are employed, it is worth checking whether you are in a workplace pension and whether your current saving rate fits the kind of later life you want. If you are self-employed, working part-time, or moving between jobs, the report is a warning that the system may not naturally do the work for you. Pensions can feel distant, technical and easy to postpone, but this report turns them into a present-day question: who gets to retire with security, and who is being asked to carry the risk alone?