Pensions Commission Interim Report 2026: Key Findings, At-Risk Groups and What Comes Next
The Pensions Commission interim report, published on 19 May 2026 under the title Pensions 2050: Evidence and Future Priorities, is a diagnostic assessment of the UK’s retirement saving system produced by the Second Pensions Commission. It confirms that 15 million working-age people are currently undersaving for retirement and identifies the groups, structural gaps, and policy areas the Commission will address in its final report, expected in Spring 2027.
Key Takeaways
- The Second Pensions Commission, established in July 2025 and led by Baroness Jeannie Drake, published its 190-page interim report on 19 May 2026.
- The report identifies three formal findings: private pensions are essential to retirement adequacy; the state pension has reached the earnings proportion envisaged by the original Turner Commission; and decumulation requires well-designed default options.
- 15 million working-age people are currently undersaving for retirement, a figure that rises to 19 million under an OBR low-volatility projection scenario.
- Women approaching retirement have a median pension wealth of £81,000, compared to £156,000 for men. The UK has the second-worst gender pensions gap among OECD nations, behind only Japan.
- The final report containing policy recommendations is expected in Spring 2027. The current call for views closes at 11:59 pm on 14 July 2026.
What Did the Pensions Commission Interim Report Find?
The Pensions 2050 interim report delivers three formal findings that together define the challenge the Second Pensions Commission will address in its final recommendations. Published on 19 May 2026, the 190-page document is diagnostic rather than prescriptive, it maps the problem with precision before the Commission proposes solutions.
With private pension wealth now central to retirement adequacy, the tax treatment of pension savings at the end of life is also drawing closer scrutiny, particularly for those planning to pass assets on to family. Understanding how to avoid inheritance tax on pensions has become a practical consideration for many savers reviewing their long-term position.
Baroness Jeannie Drake, leading the Commission, described the findings as making “a powerful case for a new national settlement for pensions.”
The three formal findings are:
- Private pension saving is essential to retirement adequacy. Automatic enrolment is the foundation, but current contribution levels are insufficient for many workers to achieve a meaningful replacement rate.
- The state pension has reached the benchmark the Turner Commission set two decades ago. It now provides an indispensable foundation, accounting for more than three-quarters of retirement income for those at the lowest end of the income distribution.
- Decumulation, how people access and draw down their pension savings at retirement, requires well-designed default options. Too many savers currently reach retirement without a clear pathway for converting their pension pot into a sustainable income.
The report draws on an extensive evidence pack produced by DWP’s Pensions and Later Life Analysis (PALLA) team, covering retirement outcomes, private pension accumulation, participation gaps, and the growing decumulation challenge.
How Many People Are Undersaving for Retirement in the UK?
The Second Pensions Commission confirms that 15 million working-age adults in the UK are currently not saving enough for an adequate retirement. Under an Office for Budget Responsibility low-volatility scenario, that figure rises to 19 million, more than half of all working-age individuals.
Pension spending as a share of GDP is projected to rise from 6% in 2024–25 to around 9% by the early 2070s, according to OBR fiscal sustainability forecasts cited directly in the report.
That fiscal pressure sits alongside a broader policy shift in how pension assets are treated within the tax system. The Government’s Labour inheritance tax policy has added a further dimension to retirement planning for those with larger pension pots, one that the Commission’s final report may need to account for.
The scale of undersaving is not a new failure, it is a structural one that has worsened quietly. Around 50% of people retiring in the 2010s were already undersaving when analysed against their state and private pension income combined, a figure DWP projects will rise to approximately 60% over the next decade.
Pensioner poverty, measured after housing costs, sits at around 14% and is projected to stabilise at that level through 2050, but Independent Age has flagged that 1.7 million older people are already living in poverty, with a further 1 million on the edge of it.
| Measure | Current Figure | Projected Figure | Source |
|---|---|---|---|
| Working-age people undersaving | 15 million | 19 million (OBR scenario) | Second Pensions Commission, 2026 |
| State pension spending (% of GDP) | 6% (2024–25) | ~9% (early 2070s) | OBR Fiscal Risks and Sustainability, 2025 |
| Share of retirees undersaving | ~50% (2010s cohort) | ~60% (next decade) | DWP analysis |
| Pensioner poverty (after housing costs) | ~14% | ~14% by 2050 | DWP / Commission evidence pack |
| Older people in poverty | 1.7 million | NA | Independent Age, 2026 |
Without structural reform, the combination of rising pension spending and growing health and social care costs, which could rise by a further 8% of GDP over the same period, creates a long-term public finance challenge of considerable scale.
Who Is Most at Risk? The Groups the Commission Identified
The Commission does not frame undersaving as a uniform problem. Four groups face retirement adequacy gaps that are materially worse than the population average, and in each case, the gap exists because the current system was not designed with their working patterns in mind.
The four groups identified as most at risk are:
- Women: Approaching retirement with a median pension wealth of £81,000, compared to £156,000 for men. The UK has the second-worst gender pensions gap among the 38 OECD member countries, behind only Japan. This gap persists despite near-equal state pension outcomes for men and women reaching retirement age in 2026, confirming the problem lies in private pension accumulation, not the state system.
- Self-employed workers: Not covered by automatic enrolment, leaving a significant participation gap. Fidelity International’s analysis found that self-employed workers may need to work several years longer than employees to achieve a comparable retirement income.
- Low and middle earners: Most exposed to the gap between minimum contribution levels and the saving rate required for genuine retirement adequacy. Housing costs and inflation compress disposable income, making even minimum pension contributions difficult to sustain consistently.
- Carers and people with interrupted working lives: The Institute for Fiscal Studies found that women’s pension contributions typically flatline after the birth of their first child, a level that remains unchanged for years. Career breaks for caring responsibilities create contribution gaps that compound over time.
The Commission is explicit that closing these gaps will require a joined-up approach across pensions policy and labour market reform, including access to childcare.
Participation vs Adequacy: The Blind Spot in Auto-Enrolment
Automatic enrolment covers approximately nine in ten eligible employees. The Second Pensions Commission and The Pensions Regulator both acknowledge that participation rate as a genuine structural achievement. The problem is that participation and adequacy are not the same thing, and the current system was designed to deliver the former, not the latter.
The 8% minimum contribution, combining employer and employee contributions, was set as a floor to establish the habit of saving, never as a sufficient replacement rate. Workers enrolled at the minimum are saving, but not necessarily saving enough.
The Commission’s evidence makes the mismatch concrete: around 50% of people who retired during the 2010s were already undersaving. That figure is projected to rise to 60% over the next decade.
The risk is structural rather than behavioural. Rising housing costs and inflation mean pension saving becomes a background financial activity, present on a payslip, absent from active planning.
The Commission describes this as a depth challenge: the system has enrolled people successfully, but minimum contributions at current rates leave too many savers on course for an inadequate income in later life. Contribution rate reform is expected to be addressed directly in the Spring 2027 final report.
The Decumulation Challenge: Why Getting Out Is as Important as Getting In
The Commission’s third formal finding addresses decumulation, the process of converting a pension pot into a retirement income. Since Pension Freedoms were introduced in April 2015, defined contribution savers have had greater flexibility over how they access their savings.
The risks at retirement differ significantly depending on the type of scheme a saver holds. The defined contribution vs defined benefit pension plan distinction matters here, defined benefit members retain a guaranteed income, whereas defined contribution savers bear the full investment and longevity risk themselves.
The Commission’s assessment is that this flexibility, without adequate defaults and guidance, is producing poor outcomes for too many people.
Two specific problems are identified: many savers significantly underestimate their own longevity, and many misunderstand sustainable withdrawal rates, the percentage of a pot that can be drawn each year without exhausting it prematurely.
Without a clear default pathway, savers are making complex decisions at retirement without the tools to make them well.
The key decumulation risks identified by the Commission are:
- Longevity underestimation: Savers consistently underestimate how long their retirement income needs to last
- Unsustainable withdrawal rates: Drawing down too quickly risks depleting savings before the end of life
- Flexibility without engagement: Pension freedoms remain valuable, but without active decision-making, they can produce worse outcomes than a structured default
- Absence of default pathways: Many defined contribution savers reach retirement with no automatic mechanism for converting their pot into a sustainable income.
The Pension Schemes Act introduces a guided retirement income product framework to address this gap. The Commission has indicated this regime warrants further consideration before finalisation, signalling decumulation will be a significant focus in the final report.
What Happens Next: The Final Report and Call for Evidence
The Second Pensions Commission’s final report is planned for Spring 2027. It will move from diagnosis to prescription, setting out concrete policy recommendations on how much people need to save, which groups require targeted intervention, and what a fit-for-purpose retirement system for the mid-21st century looks like.
The Department for Work and Pensions has indicated that any significant legislative change would be a matter for a future Parliament.
In the meantime, the rules governing pension access remain as they stand. For savers weighing up their options ahead of the final report, the question of can I withdraw money from my pension plan is one worth revisiting, particularly given the Commission’s concerns around premature drawdown and unsustainable withdrawal rates.
Before the final report, the Commission is seeking views from a wide range of individuals and organisations. The call for evidence is open now and closes at 11:59 pm on 14 July 2026.
To submit views to the Pensions Commission:
- Visit the GOV.UK Pensions Commission publications page and locate the call for evidence document
- Read the Commission’s stated focus areas, adequacy, fairness, and sustainability, before preparing your response
- Draft your submission addressing the specific questions set out in the call for evidence document
- Submit via the official online portal or by email, as specified in the call for evidence instructions, before the 14 July 2026 deadline
Submissions are welcomed from individuals, employers, charities, trade unions, academics, pension providers, and consumer groups.
How Does the Second Pensions Commission Compare to the Turner Commission?
The Second Pensions Commission builds directly on its predecessor’s architecture. The original Turner Commission, established in December 2002, produced the blueprint for the modern UK retirement system, automatic enrolment, the flat-rate state pension, and the political consensus that has underpinned pensions policy for two decades.
The Second Pensions Commission, revived in July 2025, inherits that architecture and is tasked with deciding whether it remains adequate for 2050 and beyond.
Baroness Jeannie Drake, who served on both commissions, sits alongside Sir Ian Cheshire, former chair of Barclays UK, and Professor Nick Pearce of the University of Bath.
The interim report confirms one point of continuity: the state pension has met the Turner Commission’s target. The challenge now is private pension depth, coverage gaps, and the decumulation framework that the Turner era did not need to address.
The Second Pensions Commission was established in July 2025 to assess the UK’s pension system against three criteria: adequacy, fairness, and sustainability.
Unlike the Turner Commission, which built the system from a position of structural weakness, the Second Commission inherits a functioning foundation and must determine whether it can support workers facing higher housing costs, greater income insecurity, and longer life expectancy than the Turner era assumed.
Conclusion
The Pensions Commission interim report confirms what the data now makes undeniable: the UK faces a retirement adequacy crisis driven by insufficient contribution depth, structural coverage gaps for women and the self-employed, and a decumulation framework that has not kept pace with defined contribution freedoms.
The Second Pensions Commission’s Spring 2027 final report will determine what a reformed national settlement for pensions looks like, and the 14 July 2026 call for evidence is the moment to shape it. The Pensions Commission interim report means a pivotal policy decision point for UK savers, employers, and government in 2026 and beyond.
FAQ
How many people are undersaving for retirement in the UK?
15 million working-age people in the UK are currently undersaving for retirement, according to the Second Pensions Commission’s interim report published in May 2026. Under an OBR low-volatility projection scenario, that figure rises to 19 million, more than half of all working-age individuals. DWP analysis projects the proportion of retirees undersaving will rise from approximately 50% to 60% over the next decade.
When will the Pensions Commission final report be published?
The final report is planned for Spring 2027. It will contain the Commission’s concrete policy recommendations on contribution rates, coverage gaps, and decumulation defaults. The Government has indicated that significant legislative changes arising from the final report would be a matter for a future Parliament. The current call for views closes at 11:59 pm on 14 July 2026.
What is the Second Pensions Commission?
The Second Pensions Commission is an independent government-appointed body established in July 2025 to assess the long-term adequacy, fairness, and sustainability of the UK’s pension system. It is led by Baroness Jeannie Drake, Sir Ian Cheshire, and Professor Nick Pearce. It builds on the work of the original Turner Commission (2002–2006), which introduced automatic enrolment and the flat-rate state pension.
What does the interim report mean for self-employed workers?
The self-employed are identified as one of the groups least well served by the current system. Automatic enrolment does not apply to them, leaving a significant coverage gap. Fidelity International’s analysis found that self-employed workers may need to work several years longer than employed counterparts to achieve a comparable retirement income. The Commission is expected to address self-employed pension coverage directly in its 2027 final report.
What is the gender pension gap in the UK?
Women approaching retirement have a median pension wealth of £81,000, compared to £156,000 for men, roughly half the private pension savings. The UK has the second-worst gender pensions gap among OECD nations, behind only Japan. The Commission attributes this gap to career interruptions for caring, the motherhood penalty on contributions identified by the IFS, and labour market factors that current pensions policy has not yet addressed.
Disclaimer: This article is intended for informational purposes only and does not constitute financial, legal, or pension advice. Readers should consult a qualified financial adviser or visit GOV.UK for guidance specific to their circumstances.
