In an interim report published by the Department for Work and Pensions on 19 May 2026, the Pensions Commission says 15 million people in the UK are currently undersaving for retirement. The commission adds that, without action, the number could rise to 19 million, widening the risk of a sharp fall in income at retirement for large parts of the workforce. The document is the first formal diagnosis from the commission established in July 2025. It does not set final policy, but it identifies where the present system is failing and frames the evidence base for recommendations due in early 2027.
The commission's central argument is that pension participation has improved, but adequacy remains weak and uneven. Low and middle earners, women and the self-employed are identified as the groups most exposed, with the report arguing that a system built around stable, full-time employment no longer reflects how many people work. It estimates that 45 per cent of working-age adults, or around 18 million people, are not saving into a pension at all. Nearly half of that group are in work. Among those who do save, around half of low and middle earners are contributing only at automatic enrolment minimums and have little else to rely on in later life.
The report also raises distributional concerns inside workplace pension saving. Where employer contributions sit close to the statutory minimum, the commission says current arrangements tend to leave higher earners better served than workers on lower pay. That point is likely to feed into later debate on contribution structures, thresholds and the treatment of interrupted careers. Self-employment remains one of the clearest weaknesses. Just 4 per cent of wholly self-employed workers are saving for retirement, and the rate is lower still among younger self-employed people. The commission links this to a wider failure to adapt pension policy to variable earnings, multiple jobs and non-standard employment.
The commission also examines what happens when pension pots are accessed. On current trends, it says around three in ten private pension pots are taken at the earliest possible opportunity, while half of all pots are withdrawn in full. Nearly half of those full withdrawals are spent on large one-off items such as a car, a holiday or home renovations. That shifts the discussion beyond enrolment alone. The review is now looking at whether the rules, guidance and product choices around retirement help people turn pension savings into a stable income over time, rather than a short-lived lump sum.
The government is placing this review alongside the record of the first Pensions Commission, which operated between 2002 and 2006 and helped build the case for automatic enrolment. According to the current government release, 89 per cent of eligible employees are now saving into a pension, up from 55 per cent in 2012. Ministers are using that record to argue that pension reform can work when it is gradual and supported across party lines. Even so, the interim report is explicit that the present model is incomplete. Pensions Commissioner Baroness Jeannie Drake says the UK now needs a renewed national settlement on pensions, while pensions minister Torsten Bell says tomorrow's pensioners remain on course to be poorer than today's unless saving improves.
For workers, the immediate relevance is clear. The commission's evidence, echoed by Which?, Age UK and the TUC, suggests that people with low earnings, women, carers, disabled workers, many ethnic minority groups and those in insecure work are still less likely to build an adequate pension. The report does not present a single fix, but it makes plain that pension adequacy is not just a question of participation rates. For employers, the message is more measured but still significant. The government has ruled out changes to automatic enrolment contribution levels during this Parliament, so there is no immediate rise in minimum rates. However, the interim findings put focus on how employer contributions, eligibility rules and payroll design affect lower-paid staff and workers with irregular patterns of work.
For the state, the commission frames the issue as both a social protection question and a future spending risk. Ministers say that without reform, more people could arrive at retirement with insufficient private provision and greater dependence on state support. That is why the review places weight on fairness between generations, the balance between state and private provision, and the pace at which any reforms should be introduced. Responses from industry and civil society have been broadly aligned on the need for further action, even where priorities differ. The ABI, Pensions UK, the CBI, Which?, Age UK, the TUC and The Pensions Regulator all backed the publication of the interim report, while stressing issues such as higher saving, better retirement decisions, sustainable incomes and economic growth. Alongside the commission, the government says the Pension Schemes Act passed in May 2026 will improve outcomes for 22 million workers, with ministerial estimates of gains of up to £29,000 by retirement through lower costs, stronger returns and automatic consolidation of small pension pots. A formal call for views opened on 19 May 2026, with final recommendations due in early 2027.