Pensions Commission Warns 15 Million Under-Saving Amid Gender Gap

The Pensions Commission warned that approximately 15 million people in the United Kingdom are under-saving for retirement, a figure that could climb to 19 million without intervention, while women approaching retirement age possess only half the private pension wealth of men.

The commission found that median savings for women stand at £81,000 compared to £156,000 for men. This disparity, termed the "motherhood penalty," is driven by stagnating pension contributions after the birth of a first child and a higher likelihood of women working part-time or leaving the workforce for caring responsibilities. The UK now has the second-largest gender pension gap among OECD nations, trailing only Japan.

Beyond the gender gap, the commission's interim report identifies the self-employed and low-to-middle earners as groups most at risk of a financial "cliff-edge." Only 4% of the four million self-employed workers save for retirement, and automatic enrolment contribution floors have become a norm rather than a minimum. With the population over 65 projected to reach 28% by 2075, the commission is urging ministers to implement a "renewed national settlement on pensions."

Chair Lady Jeannie Drake stated the gap is shaped by a system that fails to account for women's working lives, calling the new settlement an opportunity to renew the social contract. Pensions Minister Torsten Bell acknowledged that tomorrow's pensioners are on track to be poorer than today's, while TUC General Secretary Paul Nowak demanded a bold plan including higher employer contributions. A final report with specific recommendations is expected in early 2027.