The Pensions Regulator (TPR) and industry experts have welcomed the Second Pensions Commission’s interim report, describing it as an important step towards a more adequate, fair and sustainable pensions system.
Nausicaa Delfas, Chief Executive of The Pensions Regulator, said:
“The pensions system is still unfinished business, with too many people on track for an inadequate retirement income. That is why we welcome the Pensions Commission report, and look forward to continuing to work with the Commission, Government and industry to create a system which delivers what matters most: a sustainable income in retirement for everyone.”
In addition to the work of the Pensions Commission, the Pension Schemes Act 2026 will significantly reshape the market. We are moving to a pensions landscape of fewer, larger schemes. New models and rapid technological change present both new opportunities to improve member outcomes, as well as risks.
That is why TPR is currently consulting on its new five-year Corporate Strategy to ensure it is ready to address the challenges ahead and deliver for members of workplace pension schemes.
The strategy sets out an ambition to deliver three member outcomes consistent with the government reform agenda and Pension Commission terms of reference:
- Savings are secure: Workplace pension members’ benefits are secure and delivered as promised.
- Better value: Workplace pension members benefit from investments and services that deliver long-term value and support a sustainable income in retirement.
- Pensions are fair: People have fair access and opportunity across the workplace pensions system.
TPR welcomes input into its strategy over the coming weeks. The consultation closes on 8 June.
Andrew Tully, Technical Director at Nucleus said:
“We’re seeing a deep erosion of trust in the retirement system. Constant tinkering with pension rules makes long-term planning feel pointless. The Commission is a step in the right direction, but confidence won’t return until people believe the rules will remain stable in the long-term. We need clear communication and a joined-up approach across pensions, housing and savings to give people the certainty they need to plan properly for the future.”
Royal London’s Director of Policy Jamie Jenkins says:
“It’s great to see this early thinking from the Pensions Commission, which is living up to its promise of taking a very long-term view of how we improve our retirement system for future generations.
“This is less about fixing things for my mother in her 80s, or me in my 50s, but it’s squarely focused on my 8-year-old son.”
Andy Briggs, Standard Life CEO, comments on the Pensions Commission interim report:
“This report is in line with what we have been highlighting for years. Millions of people are not saving enough for retirement and the UK is edging ever closer to a pensions adequacy crisis. With only one in seven DC savers on track for a decent retirement, by 2040 the majority of DC savers are expected to retire with less than they expect or need.
“It is hard to see how any independent review could conclude that auto enrolment contributions set at 8 per cent are sufficient. While change cannot happen overnight, we should be setting a clear path towards increasing contribution rates to 12 per cent gradually over time.
“The report also touches on consolidation. The UK is an outlier among advanced economies in retaining a highly fragmented DC landscape. Consolidation improves member outcomes, and is not just a focus for system efficiency. It is about unlocking capability and larger schemes can invest to support infrastructure projects across the UK, and provide capital to growing companies while still meeting the primary duty to customers. Smaller schemes cannot do this consistently.
“Change needs to happen with urgency and at a much faster pace going forward. The longer we wait, the harder and more costly this becomes to fix.”
Brian Byrnes, Director of Personal Finance at Moneybox, said:
“This report is a stark but important illustration of the retirement challenges facing around 15 million people across the UK, and reinforces why retirement adequacy cannot be solved through pensions policy alone.
“One of the clearest findings is the growing link between declining home ownership and poorer retirement outcomes. Research consistently shows the vital importance of housing security in retirement, with outright homeowners needing significantly smaller pension pots to maintain their standard of living in later life compared to private renters.
“Helping more people onto the property ladder earlier in life needs to be viewed as part of the long term strategy for supporting people in retirement. Our own data shows that a Moneybox Lifetime ISA was used by a first-time buyer to purchase their first home roughly once every ten minutes in 2025. The more people we can help achieve housing security earlier in life, the more progress we make tackling the structural challenges highlighted in this report.
“It is disappointing that the report does not reference the Lifetime ISA as part of the solution set. It is one of the few products designed to support both homebuying and long term financial resilience. After purchasing a home, savers can continue using it to build retirement savings, benefiting from compounding and government bonuses over time. That is especially important for the self-employed, who remain largely excluded from automatic enrolment despite, as this report clearly states, facing some of the biggest retirement risks.”
Jon Greer, head of retirement policy at Quilter:
The Pensions Commission’s interim report is a useful snapshot of the scale of the UK’s retirement challenge, but the real test is whether it drives meaningful action rather than becoming another well-rehearsed diagnosis that fails to translate into reform.
The core issue is no longer participation. Automatic enrolment has brought millions into pension saving, but it has also exposed a deeper structural weakness. Too many people are contributing at minimum levels that are unlikely to deliver adequate retirement outcomes, creating a dangerous gap between perception and reality. People feel like they are doing the right thing, yet many remain on course for a retirement that falls short of expectations.
This is compounded by clear blind spots in the system. The self-employed remain largely excluded, and there is still a fundamental lack of engagement with pension saving more broadly. Behaviourally, inertia works well when people are nudged into saving, but it works just as effectively against them when it comes to increasing contributions or making active decisions. The result is a system that gets people through the door but does little to move them meaningfully forward.
Closing that gap cannot rely on a single lever. Better financial education has a role to play, particularly in helping people understand what a realistic retirement income looks like. However, education alone is unlikely to shift behaviour at scale. Structural change is needed, particularly for the self-employed, where the traditional model of locking money away until later life continues to act as a deterrent. More flexible savings solutions, alongside mechanisms that replicate the success of automatic enrolment in this group, will be essential if participation and adequacy are to improve together.
All of this is playing out against an increasingly uncertain policy backdrop. Proposed changes to inheritance tax on pensions, changes around salary sacrifice and National Insurance, and the ever-present possibility of further pension tax reform risk at every budget undermines confidence. When the rules of the system appear to be in flux, it becomes harder to make the long-term decisions that pension saving requires. Stability and clarity are critical if people are to commit more of their income over decades.
The other issue that cannot be ignored is the role of the State Pension. It remains the foundation of retirement income for many, but its current trajectory raises serious questions about long-term sustainability. The triple lock has provided significant increases in recent years, but it is increasingly difficult to reconcile with an ageing population and constrained public finances. If adequacy is a concern today, then maintaining both adequacy and sustainability in future will require difficult trade-offs that policymakers cannot continue to defer. Cross party agreements needs to be made to avoid the triple lock continuing to be a political football punted from one government to the other.
Ultimately, the report should be seen as a warning rather than simply an assessment. The direction of travel is clear, and the risks are well understood. What matters now is whether government is willing to act decisively across contribution levels, system design and policy stability. Without that, the gap between what people expect from retirement and what their savings can deliver will continue to widen.
Kate Smith, Head of Pensions at Aegon, comments:
“We welcome the Pensions Commission’s initial report. This highlights the alarming reality that many people are undersaving or not saving at all for their retirement. Urgent action is needed now to address this; if this doesn’t happen quickly enough, millions could face poverty in retirement.
“Working lives and employment have changed dramatically since the first Pension Commission recommendations 20 years ago, and with the introduction of auto-enrolment in 2012. Policies need to evolve to reflect people’s often disjointed working lives. We agree that a renewed national settlement on pensions is needed, with a pension reform roadmap to deliver this. The Pensions Commission presents an opportunity to make a difference to people’s later lives, and we should work together to seize it.”
David Brooks, Head of Policy at leading independent consultancy Broadstone, commented:
“The Pensions Commission’s findings are a stark reminder of the UK’s pension savings challenges, which are particularly acute for lower earners and the self-employed. Too many people are either saving too little or not saving at all which will create a significant financial issue at retirement.
“However, the Interim Report also bucks the trend of received wisdom around the success of auto-enrolment and the benefits of pension freedoms. Millions of people are still sitting outside of the confines of auto enrolment, even those who are in a job, while many of those who are saving are not contributing adequately.
“There are concerning findings around how quickly people are rushing to access their pension and the proportion who are fully encashing their pot, leaving them vulnerable to running out of money later on in retirement.
“The Report suggests that there is significantly more work to be done across the pensions industry to provide innovative solutions for millions of people – especially lower earners and the self-employed – to bring them into the system and begin to support their pension saving journey.
“While increasing minimum automatic enrolment contribution rates will inevitably form part of the debate, this is unlikely to be a panacea given the current budgetary pressures facing many households. Encouragingly, there is already a broad package of reforms that have just been passed into Law which aim to deliver better value for money for pension savers as well as improving awareness, engagement and outcomes.”
Catherine Foot, Director of the Standard Life Centre for the Future of Retirement said:
“Today’s interim report highlights just how much has changed since the last Pensions Commission ushered in today’s system of automatic enrolment (AE). While AE has successfully brought millions more people into pension saving, the hoped‑for levels of voluntary saving above the low default rates have not materialised with the current system instead giving people a false sense of security that they are saving enough for the retirement income they need. The current system of inertia has delivered mass participation, but at levels of saving that are far too low. Shifts in the labour market mean that the benefits of auto-enrolment have not been evenly spread and there are many people, notably the self-employed, who are not being supported to save.
“Despite tough economic conditions, we’ve found that employers want to support greater pension saving. They are crying out for clarity on what these changes might look like and need greater certainty about timing, pace and budgeting for any changes*. That’s why it’s important a consensus is found that begins to look beyond the immediate challenges and builds broad support around a pension system that delivers better outcomes in the long-term. Ultimately, ongoing inaction will mean costs will be borne by government, employers and society further down the line, placing further strains on social support systems and increases in poverty among those in and approaching retirement.
“This is a pivotal year for pensions policy and we need to design a system that feels fair to the people who will live with it. That is why we need public engagement and the views of a wide spectrum of people to be considered. This type of engagement, known as deliberative democracy, must be central to the next phase of reform, with it playing a vital role in building trust and consensus among citizens on the shape of future pensions policy**. We hope the Pensions Commission will ensure that there is a fair balance of responsibility between individuals, employers and the state, and look forward to supporting the essential consensus building work the Commissioners have ahead of them in the months to come.”
Ruari Grant, Head of Policy and External Affairs at TPT Retirement Solutions, comments:
“This is an important moment for us to digest this key Commission report on adequacy, especially after a period where so much attention has been diverted to structural and investment matters. As the report notes, 40% of workers are under-saving for retirement: this is sobering and I hope it will lead to some bolder decision-making – in AE we have the foundations, but at current thresholds, outcomes will remain inadequate. Let’s not forget, we’ve now been waiting almost a decade for the AE review’s recommendations to be implemented, and trends such as declining home-ownership and under-saving among the self-employed in retirement will only exacerbate the situation.
“The report’s focus on decumulation is welcome, as adequacy doesn’t simply rely on paying in enough – savers must also be able to access their money in a safe, simple and reliable manner without needing to understand all of the complex factors at play. The debate now has moved on: this is no longer about getting people to save, but ensuring the system they’re saving into will actually deliver a decent retirement. We look forward to engaging further with the Commission, especially with regard to how collective DC may assist with some of its identified structural challenges.”
Mark Futcher at Barnett Waddingham, part of Howden said:
“It’s reassuring that the Pension Commission is focused on the right issues – but it now needs to put its foot on the pedal. Too much time has already been spent diagnosing the same problems, while lower earners, part-time workers and the self-employed continue to be left behind by the pensions system.
“And for everyday workers, our research highlights just how wide the gap between confidence and reality has become. While 65% of employees at medium-sized firms believe they’ll retire comfortably, only 24% have set clear financial goals and 60% don’t know where their pension is or what it holds – a clear sign that too many people are putting their retirement on autopilot and hoping it lands safely.
“With so much to tackle, there’s a valid concern that not everything can be fixed overnight. Nevertheless, the Commission’s final recommendations in 2027 cannot pull any punches. We can’t keep staring at the same problems year after year – it’s time for decisions that genuinely move the dial on retirement outcomes.”
Iain McLellan, Director at Isio comments:
“In a bid to secure broad consensus, the Pensions Commission’s interim report sets out a comprehensive diagnosis of the challenges facing the UK from pensions under saving. It highlights the key areas of under saving including low/middle earners, the self-employed, women and many ethnic minority groups. Where employers are contributing above the statutory minimum, the report finds this is largely benefiting higher earners.
These findings won’t come as a surprise to those who work in the pensions industry. The next phase of the Commission’s work will be the hardest – what is clear is the need for greater levels of saving, but the key question is who pays for this – individuals, employers, or the State? In assessing the options, we hope the Commission supports Collective DC arrangements which have the power to substantially improve outcomes and can potentially do a lot of the heavy lifting in addressing the adequacy challenge.”
Claire Trott, Head of Advice at St. James’s Place, responds:
“The Pensions Commission is right to highlight the scale of the retirement savings challenge facing the UK, particularly for women, lower earners and the self-employed. Automatic enrolment has been hugely successful in getting millions more people saving, but too many are still not saving enough, and minimum contribution levels risk becoming seen as a sufficient rather than a baseline to build savings on.
“Our own Financial Health Report reflects these concerns. It found that 12% of people are not currently saving for retirement, while 17% say they do not currently have a pension at all. The research also highlights an ongoing retirement engagement challenge, with just one in five people regularly contributing to their pension and a notable gender gap between men and women (24% compared to 17%).
“For many people, pensions still feel complex and inaccessible, so building understanding and confidence will be key to helping people make better long-term financial decisions. While reform is needed, it is important that changes support long-term saving behaviour and maintain confidence in the pensions system.”
Doug Brown, CEO of Insurance, Wealth and Retirement at Aviva, said:
“We welcome the Pensions Commission’s findings and its focus on helping more people save for later life. Too many people are still not building enough retirement income – and our research found less than half of mid-retirees feel on track to make their pension last a lifetime.
“Auto-enrolment has been a real success, but reforms could help people save more and improve retirement outcomes. Setting a long-term roadmap for reform, including gradually increasing contributions, would be a big step towards a pensions system that better reflects how people live and work today.”
Renny Biggins, Head of Policy: Products & Long-Term Savings at TISA, said:
“We welcome the publication of the interim report which highlights there is still much work to do to ensure the pensions framework delivers fair and adequate retirement outcomes for all UK consumers. Whilst much of the report provides details of a landscape and outcomes that we already know exist, it nonetheless focuses industry and government on the issues that need to be addressed. The DC pension framework is standing on a precipice of significant change, which will revolutionise the market, the way in which people interact with their pensions and the outcomes they receive. TISA stands ready to work with our members, regulators and government to support phase 2 and create a cohesive set of recommendations which in conjunction with existing change, supports the overarching objectives of the commission and government.”
Laura Mason, CEO of L&G Retail, says:
“We welcome today’s interim report. It highlights a clear challenge: while automatic enrolment transformed pension saving in the UK, millions still risk reaching later life without the financial security they need.
“Our Decades Ahead research shows that financial wellbeing is shaped by social, economic and behavioural factors built up over a lifetime, not just savings alone. As the challenge is complex, the solutions must be too, requiring coordinated action across policy, industry, employers and third sector.
“The Commission is right to highlight ‘Gen X’ or ‘midlifers’ as a priority. We found that this group is among the least engaged with their pensions, despite time running short. Yet our analysis shows many 40–54 year olds still have a real opportunity to improve their outlook, with two to three decades to contribute, and grow their investment savings.”
Mike Brewer, Deputy Chief Executive of the Resolution Foundation, said:
“Auto-enrolment has transformed pension saving across Britain. But as this report shows, too many low and middle earners today still face the prospect of low incomes in retirement.
“In fact, many lower income families face a double savings challenge. Around two-in-five have less than £1,000 in their savings accounts, leaving them exposed to unexpected shocks like a broken boiler or major car repairs. The next phase of auto enrolment should deal with both these retirement and rainy days savings challenges.
“Ultimately, the question of what a decent retirement income should be will also depend on what people get from the state. The Pensions Review should use the evidence base it has amassed to work out how much the state pension should be worth and recommend an end date for the Triple Lock when it reaches that level.
“The Triple Lock has cost three times more than initially expected and cannot continue indefinitely, especially as since 2010 the value of working-age benefits has increased at half the rate as the State Pension.”
Andrew Zanelli, Head of Technical Engagement, at Aberdeen Adviser said;
“The Pensions Commission interim report is a timely reminder that retirement planning has become significantly more complex over the past decade. People are increasingly expected to make difficult decisions around pension access, tax, longevity, investment risk and later-life care, often without the support or understanding needed to navigate those choices confidently.
“The Commission is right to highlight that flexibility without support can create risks for long-term retirement outcomes. Choice is valuable, but complexity must be matched with clearer guidance, better engagement and systems that help people make informed decisions.
“One of the clearest themes running through the report is that the pensions system now depends heavily on engagement from consumers at precisely the point where financial decisions become most complicated. That creates a major role for advisers and the wider advice ecosystem.
“The findings reinforce the importance of modern adviser platforms being able to support increasingly sophisticated financial planning needs. Retirement planning today is rarely just about a pension pot. It increasingly involves tax planning, intergenerational wealth, trusts, income sustainability and later-life considerations.
“There is also an important recognition in the report that retirement decisions do not happen in isolation. Divorce, bereavement, caring responsibilities and later-life health challenges all affect financial outcomes, which is why holistic financial planning is becoming increasingly important.
“The long-term direction of travel is clear. People are living longer, retirement journeys are becoming more complex and individuals are carrying more responsibility for financial outcomes. That makes professional advice, strong planning frameworks and modern integrated technology more important than ever.”
