Pensions are central to people’s security and peace of mind. After a lifetime of work, everyone should be able to look ahead to retirement without uncertainty about how they’ll get by.
Right now, that’s not guaranteed. If we carry on as we are, people retiring in 2050 are likely to have lower private pension incomes than those retiring today – despite having worked for longer and paid in more. It’s clear that something isn’t working.
At the moment, nearly 15 million people of working age aren’t on track to have enough income in retirement. That includes many who are self-employed, in insecure jobs, or on lower pay. It also affects some groups much more than others – women, carers, and people from minority ethnic backgrounds are among those most likely to miss out.
There’s also a huge gender gap in private pension wealth. By the time people retire, women typically have around half the private pension income of men. That inequality builds over decades, and we need to be honest about what’s driving it.
Recently, the Labour Government launched a Pensions Commission to take a fresh look at how we close these gaps and make the system work better for the future. It’ll be looking ahead – not just focussing on what’s going wrong now, but also on what needs to change over the long term to make sure the next generation can retire with confidence.
Alongside this, other changes are already being made. The Pension Schemes Bill will help ensure people’s savings are invested in a way that delivers better returns. We’re tackling problems like “small pots”, where people end up with lots of separate pension accounts after changing jobs. And there’s a full State Pension Age Review underway, looking at how to keep the system fair, sustainable, and fit for the future.
It’s also important to recognise that pensioner poverty is rising – especially for people living alone, and renters too. That’s a real warning sign. A decent retirement shouldn’t depend on what kind of job someone had, or whether they owned a home. It should come from a system that works fairly for everyone who’s paid in.
The aim here is straightforward: to create a pension system that reflects how people live and work today, and that gives everyone a chance at financial security later in life.
People work hard, paying in over decades. It’s only right that the system pays back – with clarity, with fairness, and with the kind of support that lets people look ahead without fear.
This next phase of reform is about delivering that – not by ripping everything up, but by fixing what’s clearly falling short, and making sure no one is left behind.