Industry welcomes 'breadth and ambition' of Pensions Commission's interim report

The Pensions Commission published its interim report this morning (19 May) looking at the state of retirement saving in the UK, confirming there are "key challenges" facing the current system and that without action, millions more people could be at risk of becoming reliant on state support in retirement.

The commission added there is "much for public policy to do to shape the future of pensions, while maintaining the broad political consensus pensions has had since the Turner Commission in the 2000s".

Pensions UK chief executive (CEO) Julian Mund welcomed the "breadth and ambition" of the interim report.

"Evidence presented in the report clearly strengthens the case for more pension saving over longer working lives, alongside systemic change that delivers sustainable incomes – building on welcome reforms in the Pension Schemes Act.

"We look forward to working with government to explore how that diagnosis can be turned into a practical roadmap for reform, well before the next generation fall short of the retirement incomes they expect and deserve."

The Pensions Regulator CEO Nausicaa Delfas argued the pensions system "is still unfinished business, with too many people on track for an inadequate retirement income".

"That is why we welcome the Pensions Commission report, and look forward to continuing to work with the commission, government and industry to create a system which delivers what matters most: a sustainable income in retirement for everyone," she added.

System must evolve to meet scale of challenges

Also commenting on the interim report, Association of British Insurers director of long-term savings policy Yvonne Braun said: "The report makes a powerful case for a new national settlement for pensions. Auto-enrolment is a sturdy foundation, but must evolve to meet the scale of the challenges ahead.

"We and our members stand ready to work with the commission to deepen saving, extend coverage and support better decisions in retirement, so that everyone can look forward to greater financial security in later life."

Pensions Management Institute chief strategy officer Helen Forrest Hall said the commission's interim report is a "wake‑up call", stating AE has "transformed" participation, but "the job is unfinished and the risks are growing".

"With 15 million people undersaving, incremental change will not be enough. The Pension Schemes Act is a strong start, but the industry needs bold and innovative solutions on the scale of automatic enrolment to deliver adequate retirement incomes. We call on the Pensions Commission to be brave in its recommendations and build cross party consensus for an enduring reform roadmap.

"Trustees, scheme professionals and providers have a critical role to play, and the PMI looks forward to working with the commission to help shape ambitious, deliverable reforms with clear implementation timelines that drive confidence in the pensions system."

People's Pension CEO Patrick Heath-Lay said the interim report "clearly sets out the challenges and opportunities to shape the pensions system for a generation and help address the UK's under-saving problem".

He added: "The report balances the UK's success in revitalising workplace pension saving with concern about under-saving across the board and more severe impacts on women and ethnic minority savers and those excluded from pension saving altogether, including the self-employed.

"The next step will be for the commission to bring together business, trade unions, the pension industry, and the public to develop a consensus view on further reform. That needs to start from an idea of what the pensions system is here to do and what levels of income the state pension and legal minimum pension contributions should target. The report recognises that it's hard to make judgements about how much automatic enrolment recommends people save without a clear understanding of what an adequate retirement income is.

"The progress on pension reform that the UK has made in the past 20 years shows the value of a consensus that survives multiple parliaments and changes in government. However, the economics of reforming the system are more difficult now than in the early 2000s. People need to save more but forecasts for household income growth are challenging. Despite this, we're optimistic that the right combination of leadership, collaboration and understanding will deliver a positive roadmap for the UK pensions system."

Over the next year, the commission will hear a range of views before presenting its final report and recommendations in early 2027.

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