The government has today relaunched the much-lauded Pensions Commission – which first proposed automatic enrolment in 2005 – to lead the Pensions Adequacy Review.
Baroness Jeannie Drake, a member of the original commission, will oversee the new commission with former Kingfisher chief executive Sir Ian Cheshire and Professor Nick Pearce, director of the Institute for Policy Research.
The government said the trio would “work closely with stakeholders such as the Confederation of British Industry and the Trades Union Congress”.
The commission will work on retirement income adequacy, with a particular focus on addressing under-saving, those currently not saving for retirement, and areas of inequality.
Liz Kendall, the work and pensions secretary, said: “People deserve to know that they will have a decent income in retirement – with all the security, dignity and freedom that brings. But the truth is, that is not the reality facing many people, especially if you’re low-paid or self-employed.
“The Pensions Commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place.”
Liz Kendall, work and pensions secretary
“The Pensions Commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place.”
Torsten Bell, the pensions minister, added: “The original Pensions Commission helped get pension saving up and pensioner poverty down. But if we carry on as we are, tomorrow’s retirees risk being poorer than today’s.
“We are reviving the Pensions Commission to finish the job and give today’s workers secure retirements to look forward to.”
The commission has been tasked with making proposals for changes to pensions policy “beyond the current parliament”, the government said, with the aim of ensuring the UK’s pension system was “strong, fair and sustainable”.
Building on the Pension Investment Review and the Pension Schemes Bill, the commission will focus on the factors that stop some people from saving for retirement, as well as looking for ways to address racial and gender inequalities.
Its final report is scheduled for 2027.
Government data lays bare scale of adequacy problem
While auto-enrolment has substantially increased the proportion of people saving into a workplace pension, data from the government, as well as independent and private sector bodies, has repeatedly shown that savings are not sufficient to give people a comfortable retirement.
Half of private sector workers are only saving the legal minimum of 8% of salary (including employer contribution and tax relief).
Analysis published by the government alongside today’s announcement indicates that those due to retire in 2050 will receive 8% less private pension income than those retiring today.
Nearly 15 million people are estimated to be under-saving for retirement, while many are still not saving at all – including the self-employed and low earners.
Government data also highlights racial differences when it comes to retirement savings: only a quarter of those from a Pakistani or Bangladeshi background are saving.
The research also includes data on the gender pensions gap.
A government-backed study of pension savings and income carried out between 2020 and 2022 found a 48% gender pensions gap in private pension savings between women and men.
It reported that a woman currently approaching retirement can expect a private pension income worth over £5,000 less than a man. This equates to just over £100 per week for a woman compared to just over £200 a week for a man.
