More than two decades after its original launch, the government has announced the return of the Pensions Commission.
Back in 2002, the Labour government led by Tony Blair appointed Lord Turner to head a commission tasked with reviewing the future of private pension provision. The move came amid growing concern over the decline of final salary pension schemes in the private sector, which threatened to leave many workers with inadequate retirement savings.
The Commission’s 2006 recommendations led to a major overhaul of workplace pensions, culminating in the introduction of automatic enrolment in 2012. Despite a change in government, there was broad political support for implementing the reforms.
Since then, the workplace pension system has remained largely unchanged. Its core features include:
- Automatic enrolment for workers aged 22–65 earning at least £10,000 annually (roughly 16 hours/week at the National Living Wage).
- Employer contributions of at least 3% on earnings between £6,240 and £50,270.
- Employee contributions to bring the total up to 8% of qualifying earnings.
The system is widely seen as a success: 88% of eligible employees are now saving for retirement, compared to just 55% in 2012. But the government is increasingly concerned that people still aren’t saving enough. Consider these figures:
- By 2050, retirees could receive £800 less per year in private pension income compared to today.
- Around 15 million people—40% of the working population—are under-saving.
- Over 3 million self-employed individuals aren’t contributing to a pension at all.
These challenges aren’t new. A 2017 government paper proposed lowering the enrolment age to 18 and increasing contributions. Although legislation was passed to allow these changes, no action was taken, likely due to political hesitation around increasing costs for employers and workers.
Now, with cost-of-living pressures and recent hikes in National Insurance contributions, the government may be using the Commission’s revival to delay difficult decisions. But change is likely after the next election.
What can you do in the meantime? Consider boosting your pension contributions now to get ahead of potential reforms.
Remember: the value of investments can go down as well as up, and you may not get back the full amount you invest.
3rd October 2025
