Published: 25/05/2026 By Oliver O'Brien
The latest Pensions Commission report is a timely reminder that while pension freedoms* gave people more control, they also made retirement planning significantly more complex. The headline figure is stark: around 43% of the UK working-age population, roughly 15 million people, are under-saving for retirement.That’s not a marginal issue, it’s a systemic one!
Auto-enrolment has been a success, bringing millions into pension saving. However, it was never designed to deliver a comfortable retirement on its own. The Commission’s findings suggest that for many these minimum contributions simply aren’t enough.
Pension freedoms have also introduced a new challenge: turning a pot into a sustainable income. Drawing from your pension is often not a one-off decision, it’s an ongoing financial strategy that may need to last 30 years or more.
We’re also seeing behavioural risks that can be better managed with a clear plan and ongoing financial advice. For example, the report highlights high levels of early withdrawals and large lump sum access, which can undermine your ability to generate a sustainable income over the long term. In practice, this is something we see regularly. Without a clear understanding of how pensions work, people can make decisions that unintentionally work against their long-term interests.
Add to that the fact that only around 13% of people aged 50–75 have taken financial advice in the last year, and it’s clear many are navigating these decisions alone, despite the complexities involved.
What does this mean in practice?
From an advice perspective, there are three key takeaways:
1. Saving more still matters, a lot
For many people, the gap isn’t about investment returns, it’s about contribution levels. Small increases today can materially improve outcomes over decades.2. Timing and discipline are critical
Starting earlier gives your money longer to grow. Delaying contributions or dipping into your pension early can significantly reduce what’s available later.3. Retirement is now a phased journey
The idea of “retirement at 65 with an annuity” has largely gone. Instead, you have a flexible system but flexibility without structure can lead to poor outcomes.A gentle reality check
If you are only contributing the minimum, or if you’ve not reviewed your pension recently, the odds are you may be in that 43%. The good news is that this is one area where relatively small, manageable changes can make a meaningful difference. These can include:
- Increasing contributions gradually
- Reviewing your pension annually
- Having a clear plan for how you’ll take income
- Taking advice where appropriate
Pension freedoms were designed to empower people and they absolutely do but with that flexibility comes responsibility. The Commission’s message is clear: we’re not saving enough, and many aren’t prepared for the decisions ahead. If there’s one takeaway from this and from the Pension Commission report (if you’re brave enough to tackle all 150 pages of it) it’s this:
The earlier you engage with your pension and the more you put in, the more options you’ll give your future self.
*“Pension Freedoms” refers to changes introduced in the UK in April 2015 that gave people aged 55 and over greater flexibility in how they access their defined contribution pensions. Instead of being required to purchase an annuity, individuals can now take their pension savings in a variety of ways including lump sums, drawdown, or a combination subject to tax rules.