Second Pensions Commission publishes interim report on pension sustainability

The Second Pensions Commission published its interim report in May 2026, setting out the issues that need to be resolved to improve the sustainability of the pension system¹. The report warned that future generations are on track to face poorer retirement outcomes², and identified low and middle earners, the self-employed and women as groups not saving adequately³.

The Work and Pensions Committee has since launched an inquiry into whether minimum automatic enrolment contributions should rise, and how the cost of any increase should be divided between employers and employees¹. The cross-party committee said the inquiry would examine how auto-enrolment could be reformed to improve retirement outcomes for low earners while ensuring any additional contribution burden is shared fairly². Written evidence is being accepted until 4pm on 26 October 2026².

Minimum auto-enrolment contributions currently stand at 8 per cent of qualifying earnings, comprising a 5 per cent employee contribution and a minimum 3 per cent employer contribution, and apply only to people earning over £10,000¹. The government currently has no plans to increase minimum contributions, but has tasked the Commission with examining the pension system's long-term future, fairness and adequacy¹.

Committee chair Debbie Abrahams said:

The interim report's findings sit alongside separate research on retirement adequacy. Scottish Widows' National Retirement Forecast estimated that 12.2 million people, or 31 per cent of adults, risk facing poverty in retirement, down from 15.3 million (39 per cent) in the previous year's projections⁴. Pensions UK's retirement living standards report put a comfortable lifestyle for someone living alone at £45,400 a year, a level nine per cent of people are on track to hit, a moderate lifestyle at £32,700 (23 per cent on track) and a minimum lifestyle at £13,900 (over 80 per cent on track)⁵. Which? reported Pensions UK figures of £13,400 for a minimum single household income and £43,900 for a comfortable one⁴. The two sets of figures differ and the sources do not reconcile them.

Pensions minister Torsten Bell said in September 2026 that those retiring in 2050 are on track for private pension incomes 8 per cent lower than people retiring today, and that the number of people aged over 75 is set to double between now and 2075³. The Commission's interim findings put the number of people under-saving for retirement at 15 million, which could reach 19 million without action³.

Why it matters for households

The contribution rates that decide how much goes into a workplace pension are the subject of the inquiry, not a settled change. Anyone earning over £10,000 and enrolled in a workplace pension currently pays 5 per cent of qualifying earnings, with the employer adding at least 3 per cent¹. Low earners are more likely to be under-saving but also the most exposed to any increase in employee contributions, and small businesses with stretched resources are similarly exposed to an increase in the employer rate¹. The Pensions Policy Institute has warned that no single reform to auto-enrolment thresholds can protect every low earner from both retirement inadequacy and financial vulnerability during their working lives².

Separately, the Resolution Foundation noted that the minimum age for accessing pension funds rises from 55 to 57 in April 2028, still a decade before the State Pension begins⁶. The self-employed are not covered by auto-enrolment, and the Society of Pension Professionals has warned that millions are left without access to pension provision³. How pensions interact with means-tested support is set out in our guide to how pensions affect Pension Credit and other benefits, and the Pensions Commission's findings feed into the wider picture covered in our pensions guide.

What happens next

The Work and Pensions Committee is accepting written evidence until 4pm on 26 October 2026². The Commission is due to release its final recommendations in spring 2027⁵.