The Pensions Commission has warned that the pension system needs to evolve to meet modern working lives, with 15 million people in the UK currently undersaving for retirement, according to its interim report.

The report highlighted that the issue was particularly evident among low and middle earners, the self-employed, and women, and the number undersaving could reach 19 million people without action.

Its interim report assessed why working-age adults were on track to be poorer than today’s retirees, with a final report including recommendations to follow in early 2027.

The commission was established by the Government in July 2025, and aims to address a pension saving ‘challenge’ it said had been building for decades.

The interim report warned that low and middle earners were most at risk, with around half only saving at minimum auto-enrolment (AE) contribution levels, and employers contributing the minimum level were largely benefitting higher earners.

It also found that 45% of working-age adults were not saving into a pension at all, despite nearly half of them being in work, while just 4% of wholly self-employed workers were saving for retirement.

Meanwhile, around three in 10 private pension pots were being accessed at the earliest opportunity and around half were taken out in full.

Nearly half of these were spent on large expenses, such as a car, holiday, or renovations, rather than providing an income in retirement.

In its final report, the commission will outline the roadmap to improving future outcomes while ensuring the system is fair and sustainable within and between generations.

It added there was much for public policy to do to shape the future of pensions while maintaining broad political consensus, and any changes must be implemented gradually.

The Government has ruled out any changes to AE contributions this parliament.

Over the next year, the commission will seek views from a range of stakeholders before presenting its final report and recommendations in early 2027, with a call for views also being launched today (19 May).

"Over the past two decades since the Turner Commission there is no doubt pensions reform can be described as a success,” commented Pensions Commissioner, Baroness Jeanie Drake.

“Yet the second Pensions Commission is looking forward and seeing many people not saving enough and millions not saving at all. This demands 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 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.”

Pensions Minister, Torsten Bell, added: "Britain has got back into the pension saving habit, but the job is only half done with tomorrow’s pensioners still on track to be poorer than today’s.

“The Pensions Commission sets out clearly the scale of the challenge: not enough people are saving for retirement, and many of those that are aren't saving enough.”

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