There is a future pension savings crisis for those retiring in 2050.

They could be 8% worse off than today’s pensioners unless urgent action is taken to boost retirement savings, according to a stark warning from the UK government.

The Department for Work and Pensions (DWP) is reviving the Turner Pensions Commission, which first reported in 2006, to explore ways to address the looming shortfall in pension income.
This renewed commission will report in 2027 and aims to build a national strategy for long-term pension reform, bringing together trade unions, employers and independent experts.

“Everyone deserves dignity and security in retirement, but right now many workers – especially those in the private sector – will find themselves without enough to get by on,” said Paul Nowak, general secretary of the Trades Union Congress.

Future Pension Savings Crisis- Who’s Not Saving – And Why It Matters

The DWP’s latest figures reveal several concerning trends:

  • 3 million self-employed people are not saving into pensions
  • Just 1 in 4 low earners in the private sector are contributing
  • Only 25% of people of Pakistani or Bangladeshi heritage are saving
  • A 48% gender gap in private pension wealth exists

“Hopefully this can be avoided in future, and particularly disadvantaged groups, including low-paid women and self-employed people on low incomes, can be helped to put money aside,” said Caroline Abrahams of Age UK.

There is also concern over the state pension age, currently 66 and due to rise to 68 by 2046.

Reviews may accelerate this timeline. Two independent reports on this are now underway, one led by the Pensions Policy Institute and another by the Government Actuary’s Department.

The Triple Lock: Sustainable or Not?

Introduced in 2010, the triple lock guarantees that the state pension rises each year by the highest of:

  • Average wage growth
  • Inflation
  • Or 2.5%

While this has protected pensioners from falling behind in real terms, the cost is set to triple by the end of the decade due to spikes in wages and inflation.

The government has made it clear that the Commission will not directly address the state pension or the triple lock – although it remains a topic of intense scrutiny.

Future pension savings crisis: What Will Retirement Cost in 2050?

According to the Pensions and Lifetime Savings Association (PLSA), here’s what retirees need annually today to maintain certain living standards:

  • Minimum standard: £13,400 (single) / £21,600 (couple)
  • Moderate lifestyle: £31,700 (single) / £43,900 (couple)
  • Comfortable retirement: £43,900 (single) / £60,600 (couple)

“The next two decades are when the effects of the savings crisis will start to bite,” warned Catherine Foot of the Standard Life Centre for the Future of Retirement.

What Needs to Change?

Experts say current auto-enrolment rates simply aren’t high enough.

“The Commission must make bold, brave and possibly unpalatable recommendations,” said Kate Smith of Aegon, calling for “significant increases” in contributions after 2029.

“If we do this gradually over a decade or more, we won’t feel it in the same way that most people didn’t feel automatic enrolment contributions increasing in the 2010s,” said Barry O’Dwyer, CEO of Royal London.

Final Thoughts

With the government now acknowledging that millions could face hardship in retirement, the message is clear: action is needed now.

Whether through increased contributions, expanded coverage, or better support for underrepresented groups, the future of pensions in the UK is at a crossroads.

Please don’t hesitate to contact us today for assistance with your retirement planning.