The government’s announcement today of a new Pensions Commission marks a timely and much-needed step toward addressing the long-term adequacy of retirement incomes. Based on the launch, some of the most respected industry names and leaders have shared their expertise.
Kirsty Anderson, retirement specialist at Quilter comments:
“The revival of the Pension Commission is a welcome move. A joined-up, long-term approach to retirement policy is essential if we are to address the growing challenges facing future retirees. With nearly half of working-age adults saving nothing for retirement, the Commission’s remit must be bold and forward-looking.
Areas ripe for reform include increasing the level of contributions via auto-enrolment and the extension of auto-enrolment to younger workers. Lowering the age threshold would help embed positive savings habits early, giving more people a realistic chance of financial security in later life. However, reforms must be carefully calibrated to reflect the economic pressures facing young earners. Government support will be vital to ensure any changes are both effective and affordable. At the same time, any increase in contribution rates must be handled sensitively to avoid placing undue strain on businesses – particularly in the wake of recent changes to National Insurance Contributions. A staggered or phased approach may be necessary to give employers time to adjust, especially smaller firms already grappling with rising employment costs and tight margins.
The Commission will confront the persistent gender pensions gap, which sees women approaching retirement with significantly less pension wealth than men – often less than half. This disparity is driven by a range of factors including lower lifetime earnings, career breaks for caring responsibilities, and unequal access to workplace pensions. Tackling this issue will require targeted reforms such as reviewing auto-enrolment thresholds, improving pension sharing on divorce and ensuring childcare support enables women to remain in the workforce.
The Commission will try to address the persistent gap in pension saving among the self-employed. Only around 20% of self-employed individuals were contributing to a pension between 2018 and 2020 – compared to 80% of employees. This has been looked at previously with suggestions including leveraging the annual tax return as a practical mechanism to default the self-employed into pension saving, with the option to opt out.
Another route that has been explored for the self-employed is to allow limited emergency access to pension savings, which is reported as an innovation the government has shown growing interest in. While this could encourage higher contributions by offering reassurance, it must be approached with caution. The pensions ‘sidecar’ model trialled by Nest showed promise, but engagement remained low. Diverting funds to a liquid pot risks undermining the long-term discipline needed to build adequate retirement savings.
On the state pension, the upcoming age review due by 2027 will be politically sensitive. Accelerating the rise to 68 may be necessary to protect sustainability, but must be justified with updated life expectancy data and a clear understanding of regional disparities. The triple lock, while out of scope for the Pension Commission, remains a fiscal pressure point – forecast to cost £15.5bn annually by 2030 according to the OBR. A broader review of pension adequacy and system sustainability is urgently needed.
Finally, the proposed inclusion of pensions within inheritance tax rules by 2027 risks damaging public trust in pension saving. While few estates may pay more tax, many families could face unnecessary complexity and distress. We urge HM Treasury to consider a simpler, standalone flat-rate charge that meets policy goals without creating an administrative burden. The industry has offered workable alternatives. It’s time for the government to listen.
Ultimately, people need to take responsibility for their own retirement and plan ahead, and taking professional advice or financial guidance earlier in life is a sensible step.”
Jim Boyd, CEO of the Equity Release Council, said: “While the focus on ensuring more people have the potential to enjoy better incomes in retirement is entirely sensible, it does raise some interesting questions for industry, Government and ordinary savers.
Should the entire responsibility for securing a good standard of living rest exclusively on lifelong saving into a pension – or is it time to consider more holistic approaches. The advent of auto-enrolment was a great step forward championed by the Pensions Commission but in the current more complex market, should we be considering a Retirement Commission looking at important connected issues including care funding and better lives in retirement.
Half of UK households (51%) are expected to require housing wealth to support their spending needs in later life and retirement – unlocking over £23 billion, in today’s prices, each year by 2040 – according to new modelling by Fairer Finance. This is a significant figure that could do much towards the shortfall that the 15 million people who are under saving for retirement are likely to face.
There is no magic bullet and measures such as reviewing the state pension age are unlikely to be popular but if we are able to encourage people to take a broader long-term view of their finances, more people will enjoy better retirements.”
Laurence O’Brien, a Senior Research Economist at IFS and an author of the briefing, said:
‘Despite the success of automatic enrolment in increasing the share of employees saving in a workplace pension, our recent research has shown that, among employees saving in a defined contribution pension, almost seven million appear on course for a disappointing income when they reach retirement. Alongside this, only one in five self-employed workers are currently saving in a pension. In the face of these trends, the launch of a new Pensions Commission, focusing on the adequacy of retirement incomes is welcome. However, any reforms to boost pension saving must be carefully targeted to minimise falls in take-home pay among those who can least afford them.’
SPP President, Sophia Singleton, said;
“The SPP has been developing its thinking in this important area for some time, bringing together a diverse range of industry experts to consider the issue, so today’s announcement is very welcome.
The DWP’s own research shows that more than a third of working age people, equivalent to 12.5 million people, are not saving enough for retirement, which helps to demonstrate both the need for action and the scale of the challenge.
There are delivery challenges – political, social and economic – in increasing minimum AE contribution rates, but these are not insurmountable. We commend the Government for considering a range of other solutions beyond AE, not least because AE covers less than two thirds of the UK’s working population and because there are so many under pensioned groups – women, disabled people, those from an ethnic minority and many in the LGBTQ+ community.
A collaboration between industry, government and savers is needed to secure our shared ambition of pensions adequacy for all and launching reviving the Pensions Commission kick-starts that process.”
James Carter, Head of Platform Policy, Fidelity International comments: “We welcome the Government’s decision to launch the Pensions Commission to explore the critical question of contribution adequacy – how much is enough?
Despite the success of auto-enrolment, we know that many people are not saving enough and risk reaching retirement with a significant financial shortfall. This is particularly true of certain demographic and working groups, and the Commission’s plans to explore this are a welcome step towards narrowing the pension gaps that exist.
With the UK’s growing reliance on defined contribution pensions, it’s essential that state, workplace, and private provision are considered together to ensure a secure retirement for today’s savers and future generations. Considerations must be made towards both eligibility for automatic enrolment, how the quantum of contributions might increase in the future and how workplace pensions together with the State Pension can provide fair and adequate retirements. This review comes at a time of economic pressure for both public finances and employers, and we must acknowledge the challenges this presents.
While we support the Commission’s work, we call for urgent progress. Delays will only widen the pensions gap and undermine outcomes for future retirees. Balancing the need to raise contribution levels with what is affordable for employers and individuals will not be easy – but it is necessary
We also encourage the Government to take a holistic view, including pensions taxation in its considerations, to help shape a sustainable and effective policy framework for the future and avoid the constant speculation about pension taxation changes which risk causing real harm to consumers”.
Julian Mund, Chief Executive of Pensions UK, said: “Pensions UK supports the ambition this Government is showing by setting up a second stage of the landmark Pensions Commission, 20 years on. There is a significant job to finish: Pensions UK research shows one in five working households are on course to fall short of the income needed to meet the Minimum Retirement Living Standard. Higher pension contributions must become the norm, with more people brought into saving, and a State Pension that always protects against poverty.
We are currently undertaking research to explore how building more flexibility into the automatic enrolment system might deliver better outcomes overall, as an input to this work.
Pensions UK has a clear purpose: to help everyone achieve a better income in retirement. We are optimistic the Commission will make real strides towards delivering a pension system that is adequate, affordable and fair, and stand ready to lend our expertise to the review panel as they tackle these vital issues.”
Damon Hopkins, Head of DC Workplace Savings at leading independent financial services consultancy Broadstone comments:
“The data released by the Government today demonstrates both the widespread level of inadequate saving and serious inequality within the system.
It is right that the Government is taking a long-term lens to its reforms via the Commission. While automatic enrolment (a result of the same Commission’s review in 2006) was a significant step in the right direction, almost half of working-age adults are still not saving into a private pension at all which means participation and levels of savings are key issues for the commission to address.
In doing so, any changes must stand the test of time as constant tweaking undermines confidence and doesn’t tally with the long-term nature of pension saving that employers and employees are being asked to make.
The launch of the State Pension Age Review is a necessary step and we would not be surprised to see an acceleration applied to the increase of the State Pension Age. The combination of an ageing population and the huge fiscal cost of the State Pension would suggest that a change is inevitable. A lower or later State Pension would, of course, double down the need for reform in the private savings landscape”
Emma Douglas, Wealth Policy Director at Aviva, said:
“We warmly welcome the new Pensions Commission.
Progress in narrowing the gender pensions gap has been slow, and without action, parity could remain decades away. Aviva’s pension contribution data (June 2025) highlights a concerning trend: mid-life women are facing a widening pension gap. Over the past four years, the gap for women aged 30 to 45 has grown by an average of 3%.
Auto-enrolment reforms offer a valuable opportunity to accelerate change. To ensure success, we urge the government to set out a clear roadmap detailing how and when these reforms will be implemented. A phased approach will give employers and savers the time they need to prepare – helping to secure better retirement outcomes for millions of workers.
We look forward to actively engaging with the Commission and contributing to a pension system that supports UK growth and delivers stronger outcomes for all savers.”
Sarah Brown, Principal and Senior Actuary, Gallagher says:
“A commission to review pension adequacy in the UK is long overdue. Auto-enrolment has been a big success by increasing the number of people saving for their future, but it does risk a false sense of security with the level of mandatory contributions leave many at risk of under-saving. Household budgets are still stretched and after recent rises in National Insurance and the National Living Wage, many employers are also feeling cost pressures. So any reforms will need to be phased in carefully to avoid causing too much of a shock on personal and corporate finances.
This is a really important long term topic so an independent commission with consensus support from across the political spectrum is vital, helping take the politics out of pensions while creating space for fresh thinking and laying the groundwork for long-term reform. Ideally, any review will also consider general savings activity and seek to influence reforms in access to financial guidance – helping to address wider financial confidence and resilience. We need a comprehensive review of what financial security should look like for generations to come instead of more patchwork changes. That means tackling adequacy, fairness and affordability across state, workplace and self-employed long term saving head-on.”
Claire Trott, Head of Advice at St. James’s Place, says:
“We warmly welcome the Government’s launch of a new Pensions Commission, which presents a clear opportunity to improve the nation’s retirement outcomes and tackle the current barriers stopping people from saving for retirement. With the UK currently facing a substantial pensions adequacy gap – with three in five people not confident they’ll have enough for even a moderate standard of living in retirement and 17% relying entirely on the State Pension – today’s update is a much-needed step forward in improving the nation’s retirement outcomes.
That said, to deliver in tackling the UK’s retirement savings gap, the Commission must result in bold action. That means improving financial education, both in schools and through key life stages, so people can make timely, informed decisions. We also need to tackle the shortfalls in auto-enrolment contributions. While the cost-of-living crisis is a real constraint, encouraging even modest increases in pension savings over time will make a difference. Maintaining confidence in pensions is equally vital.
Constant speculation around pension tax rules risks undermining trust in what should be a long-term, stable savings vehicle.
We welcome the Government’s recent steps to address the advice gap through their targeted support proposals, but the entire system needs to evolve to ensure people are equipped, empowered, and encouraged to save for the future they deserve.”
Patrick Heath-Lay, the Chief Executive Officer at People’s Partnership, said:
“Reviving the Pension Commission will give us a chance to take a fresh look at pension reform from the bottom up – to ask what savers really need and how we can better support them, with the focus firmly on helping people achieve the retirement they deserve.
There is clear evidence that millions of people aren’t saving enough for the standard of retirement they would like, so it’s vital that the Government works with the pensions industry, business community and unions, considering every option and ensuring that all voices are heard.”
Commenting on the relaunch of the Pensions Commission, Chris Cummings, Chief Executive at the Investment Association said:
“We welcome the focus of the new Pensions Commission in identifying the barriers that are preventing people from saving for their retirements. Tackling these barriers is a matter of urgency if we’re to build stronger financial foundations for the next generation of retirees.
Auto enrolment has been a great success story, yet for many people current contribution levels are simply not high enough to enjoy the retirement incomes they expect. Being clearer about the levels necessary to close the gap is essential and changes could be introduced gradually to reflect the challenging cost-of-living many are still facing. We also welcome the Commission’s focus on addressing the barriers faced by self-employed workers, ethnic minority groups and women, so that these groups can enjoy financial security in retirement.”
Rachel Vahey, head of public policy at AJ Bell, comments:
“After 20 years, the government has breathed new life into the Pensions Commission, reviving it to solve the pension under-saving crisis of those due to retire in the mid-century.
After the success of the Turner Pension Commission in ushering in the automatic enrolment reforms which changed pension saving in the UK forever when they were introduced in 2012, the government has gone back to the concept of a Pension Commission, hopeful it will bring about the next pension saving revolution.
The government’s own analysis points to a dire need for intervention. Retirees in 2050 are on course for 8% less private pension income than those retiring today. While automatic enrolment has created 11 million new pension savers, many are saving the bare minimum. The demise of private sector defined benefit pensions and a levelling down of contribution rates by some private pension schemes have meant that, although there are more pension savers in the UK, they are not all saving enough.
The solution could be higher contribution rates. But new plans for demanding employers stick their hands in their pockets once more, so soon after the national insurance hike, will be deeply unpopular, even if Labour has ruled out increasing pension contributions for employers in this Parliament. Meanwhile, many low earners would also struggle to pay higher contributions out of a low disposable income hit by inflation. It’s likely the revived Pension Commission will have to think smarter, and that a more nuanced approach is needed. That could include measures like higher contribution rates depending on earnings, moving away from the blanket minimum that applies to all eligible workers today.
The self-employed are also a key focus, with over three million currently not saving into a pension. Ignored by automatic enrolment, there has been much talk over the past 13 years to bring them into the fold of regular saving, but so far no idea has proved to be the winner.
But the Commission could turn its gaze much wider than just contribution rates. It promises to look at the balance between all types of pensions, and that could mean a review of the state pension as well, at the same time as the government launches its formal review of the state pension age.
The state pension age will gradually increase to age 67 between 2026 and 2028. It’s also due to rise to 68 in the mid-2040s. It’s entirely possible – if not likely – this latest review will advocate bringing forward that increase to the late 2030s to save future governments’ money.
Pensions minister Torsten Bell recently ruled out scrapping the triple-lock guarantee, but as the state pension grows ever closer to the frozen personal allowance threshold it could be that the government is finally forced to address the question of how much the state pension should really offer, at what age, and how it can increase payments sustainably each year.”
Paul Leandro, Partner at Barnett Waddingham, comments: “The Government has – finally – announced its laser focus on the ticking timebomb that is the UK’s retirement savings crisis. The revived Pension Commission certainly has its work cut out.
The ambition to explore the barriers stopping people from saving enough for retirement is needed, but work on this already done by the industry needs to be recognised. A final report in 2027 means at least another two year delay before solutions will be implemented – which pushes the timebomb closer to detonation. And while the Pensions Minister’s commitment not to increase pension contributions in this parliament will surely prompt a sigh of relief from employers who are still grappling with the NI hike, the ‘right, long term answer’ will indeed include pushing people from an 8% saving rate to at least 12%. In all likelihood, the responsibility for that will need to be split between employee and employer.
Good news comes in the explicit statement of intent to tackle the gender pensions gap, as well as low savings rates in the Pakistani and Bangladeshi communities. Two other groups who should not be overlooked are renters – as a quarter of 55+ workers are still renting, which massively impacts their chances of a comfortable retirement – and the disabled community, who are under-employed and grappling with higher short- and long-term costs.”
James Alexander, CEO of UKSIF, said: “The decision to revive the Pensions Commission suggests the government is taking systemic shortfalls in retirement savings seriously. This body must now drive long-term reforms that tackle the huge standards of living crisis facing workers.
We recognise these developments must be delivered gradually, addressing both employer and individual affordability considerations. But put simply, without significant changes, millions of pensioners will risk unnecessary hardship in their later years.
The right reforms have the potential to generate large pools of pension capital, which could increase investment into private markets and the wider economy. This can lead to a win-win situation, as the money can also help fund our high-growth areas, such as the clean energy sector.”
Nausicaa Delfas, Chief Executive of The Pensions Regulator said:
“Thanks to automatic enrolment over 11 million more people now save into a pension, and we are determined to make sure each and every one of those workers receive value for their money.
But many people are heading for an insecure retirement. That is why we look forward to continuing to support government in its mission to address adequacy and encourage industry to engage with the Pensions Commission to make the pension system work for everyone.”
Chira Barua, CEO of Scottish Widows and CEO of Insurance, Pensions & Investments at Lloyds Banking Group: “We’ve been mapping trends in the UK’s retirement saving for 20 years and while automatic enrolment has been a gamechanger in kickstarting pensions saving for millions of workers, 39% (around 15 million) still risk facing poverty in retirement and action needs to be taken while there’s still time.
Bringing all the right groups and the industry together in this way made real progress last time, and we look forward to supporting the Commission in getting closer to cracking the pension crisis.”
Lou Davey Head of Policy and External Affairs at the Independent Governance Group (IGG) comments on the announcement of an independent commission to review pension saving adequacy:
“We warmly welcome the announcement of an independent commission to review pension saving adequacy. IGG has long called for a commission to look at issues like this, where the policy must extend well beyond the current government. This review shouldn’t face any further delays.
Phase 1 of the Pension Investment Review focused on asset allocation, the building of scale, and value for money. We strongly believe that the issue of adequacy cannot be separated from the delivery of good value, and international comparisons show that the building of scale alone does not deliver significantly improved median returns for members, particularly when compared to the returns currently achieved by members of UK schemes.
Alongside maximising the value delivered by investments in a pension scheme, the adequacy of contributions into DC schemes must also be addressed, as must the consolidation of individual members’ pots where a good deal of value is currently lost. We are delighted to see both of these issues being addressed in the Pension Scheme Bill as well as the newly announced adequacy review.
The adequacy of retirement income is not solely driven by increasing existing Automatic Enrolment (AE) contributions. Large parts of the working population are not captured by AE, and the current system disproportionately impacts women and minority ethnic populations who are more likely to have career breaks or earnings below the threshold (or multiple jobs that do not reach the earnings threshold). It is only right that the review also examines these wider issues, and we hope that the role that the state pension and housing play will also be considered. For example, the additional retirement income that someone privately renting into retirement will need when compared to a homeowner is striking.
The review report is not due until 2027, which is disappointingly still a long way off. However we are encouraged to see the commission includes experts like Baroness Jeannie Drake, who have been deeply engaged in this issue over many years. We hope the resulting review is robust and its recommendations form a solid roadmap that all political parties are on board with.”
Ruth Handcock, CEO at Octopus Money, said:
“Our current pensions are broken, and the numbers prove it. There’s been a huge generational shift in responsibility for retirement planning, moving from employers to individuals without the support needed to make that work. For example, my mum had a modest salary as a primary school teacher, but thanks to her Defined Benefit pension, she could retire comfortably. Today, only 12% of people have access to that kind of certainty.
I want to remind decision makers that financial education and personalised planning must be at the heart of any solution. Without a clear plan, most people are left hoping they’ll have enough. At Octopus Money, we’ve seen the transformative power of planning firsthand: 89% of people using our coaching service feel more financially resilient, and a quarter increase their pension contributions, retiring almost £300,000 better off.
This Commission is a chance to finally take a joined-up approach to fixing the pensions gap. It’s going to take government action, employer involvement, and bold reform. If we get it right, we can turn this from a slow, uncertain decline into a future where everyone can look forward to retirement.”
Jeremy Goodwin, Partner and Head of Pensions at global law firm Eversheds Sutherland said:
“The announcement of a new Pension Commission to examine how to tackle the adequacy challenge is very good news. Ensuring today’s workers have enough money to enjoy a decent standard of living in retirement is the number one challenge the industry faces. Addressing the inequalities that currently exist in the system is a critical part of this. Therefore, I am delighted the government is tackling these issues head on.
Relaunching the Pension Commission, which led to the successful introduction of automatic enrolment, is a great way to go about this as it should enable all of the issues and nuances to be fully examined. It will hopefully also help to build a strong consensus around the way forwards which was a key ingredient of the success of the original Turner Commission.”
Caitlin Southall, Director of SSAS Transformation and Proposition at WBR Group states:
“As long-time advocates of a pensions commission, we’re delighted to see that such a commission will be resurrected. We hope that this move will quash the almost weekly rumours floating about regarding potential tax raids and rule changes, and help to restore trust in pensions.
Noting the continued and seismic pension legislation over the past few years, pension savers, advisers and the industry needs stability. This can be achieved by creating a sustainable pension strategy, eradicating the use of pensions being used a political football.
There has to be a better, fairer and more understandable platform on which savers can build wealth for their retirement.
We hope that SSASs will form a key part of the commission’s scope, noting it’s unique ability to provide both tax efficient pension saving and opportunities for economic growth and business growth via functionality like business loan backs.”
Mike Barrett, consulting director at the lang cat, comments on the revival of a Pensions Commission:
“This is a positive step especially if the Commission can tackle some of the bigger issues surrounding pensions and improving provision so more people benefit from better retirements.
At the lang cat, we have provided input to the government’s work on financial services strategy and our first recommendation was the formation of a long-term savings commission. The key to the success of the last Pensions Commission was cross-party consensus, and it’s crucial that all political parties get behind this new Commission to create consistency and decision-making around long-term savings.
Care now needs to be taken to deliver any change in a sensible and controlled way. Constant tinkering with the pension regime creates a huge overhead for providers and advisers. It also risks reinforcing the perception of a sector that is increasingly impenetrable, making it difficult for consumers to engage with and plan for their retirements.”
