The UK Government has relaunched the Pensions Commission—almost two decades after its original success—to confront a growing retirement savings crisis that threatens to leave future pensioners worse off than today’s.
Announced on Monday 21 July 2025, the revived Commission will investigate why millions of workers are on track for poorer retirements and recommend reforms to build a pensions system that is strong, fair, and sustainable.
Why Is Action Needed?
New analysis shows that without significant intervention, retirees in 2050 will receive on average £800 less per year in private pension income than today’s pensioners. Currently, nearly 15 million people are under saving for retirement—reflecting that 45% of working-age adults are saving nothing at all.
Some groups are particularly vulnerable:
- Over 3 million self-employed people do not save into a pension.
- Only 1 in 4 low earners in the private sector are enrolled in a pension.
- Just 25% of workers from Pakistani or Bangladeshi backgrounds are saving.
- Women nearing retirement typically receive £5,000 less in private pension income per year than men—a 48% gender pensions gap.
Building on Past Success
The original Pensions Commission, established in the early 2000s, led to the introduction of Automatic Enrolment, which has transformed UK pension saving. Since its launch in 2012, eligible employee participation in workplace pensions has jumped from 55% to 88%.
However, most workers contribute only the minimum 8%, which is often insufficient to secure an adequate retirement income.
Who’s Leading the New Commission?
The Commission will be led by:
- Baroness Jeannie Drake, who served on the original Commission,
- Sir Ian Cheshire, a leading business figure, and
- Professor Nick Pearce, an expert in social policy.
Their task is to identify and address the complex barriers preventing people from saving adequately and propose reforms with long-term impact. The final report is expected in 2027.
Broad Support Across Sectors
Government ministers and leaders across business, finance, trade unions, and advocacy groups have welcomed the initiative.
Liz Kendall, Secretary of State for Work and Pensions, stated:
“People deserve to know they will have a decent income in retirement. That’s not the reality for many—especially the low paid and self-employed.”
Chancellor Rachel Reeves added:
“We’re making pensions work for Britain. This Commission will help ensure people can look forward to a comfortable retirement.”
The Confederation of British Industry (CBI), Trades Union Congress (TUC), Age UK, Legal & General, and financial industry leaders all expressed strong support for the renewed focus on pension adequacy.
Also Under Review: State Pension Age
Alongside the Commission, the Government has launched a review of the State Pension Age. Two independent reports—one by Dr Suzy Morrissey and another by the Government Actuary’s Department—will guide future decisions about how long people should expect to work and how to fund retirement sustainably.
With one in three adults now facing a pension shortfall, the revival of the Pensions Commission is a crucial step toward safeguarding the financial futures of millions of workers across the UK.
