The Pensions Commission has highlighted that many people are failing to save enough for retirement, particularly among low and middle earners, the self‑employed and women.
In an interim report published today, it says the pension system needs to evolve to meet modern working lives.
Torsten Bell, Minister for Pensions, said: “The Commission warns that without action millions more people could be at risk of becoming reliant on state support in retirement.”
There are currently 15m people under saving for retirement which could reach 19m without action, leaving large groups across the UK facing a severe cliff-edge when they retire, the report warns.
It found that 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.
It also found that 45% of working-age adults - around 18m people - are not saving into a pension at all, despite nearly half of them being in work.
The report said that employers are contributing about the statutory minimum, which is largely benefiting higher earners.
It found that 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 three 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.
Pensions Commissioner, Baroness Jeannie Drake said the details “demand a renewed national settlement on pensions.
“Achieving this will require clarity of purpose, but it also offers a moment of opportunity; to renew a social contract that commands confidence across the country.”
The Pensions Commission is due to publish a final report with recommendations in early 2027.
Baroness Drake said: “The recommendations we present in our final report will address the need to secure adequate income in later life and a pension system that is fit for decades to come.”
Dr Yvonne Braun, ABI director of long-term savings policy, said: “The report makes a powerful case for a new national settlement for pensions. Automatic enrolment is a sturdy foundation, but must evolve to meet the scale of the challenges ahead.”
Julian Mund, chief executive of Pensions UK, said: “Evidence presented in the report clearly strengthens the case for more pension saving over longer working lives, alongside systemic change that delivers sustainable incomes – building on welcome reforms in the Pension Schemes Act.”
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.”
The Pensions Commission was set up by the Government in July 2025, with the aim 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.
The Commission 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.