Work and Pensions Secretary Liz Kendall has announced a new review into the state pension age, alongside the revival of the Pension Commission, amid growing concerns that future generations of pensioners could end up poorer than those retiring today.
Review of State Pension Age
Under current legislation, the government must carry out a review of the state pension age — now set at 66 — every six years. The last assessment was completed in 2023, and the next one, unveiled today, is scheduled to conclude in 2029. The review will assess whether the current age remains appropriate, factoring in changes in life expectancy, demographic shifts, and economic realities.
The announcement comes at a time when experts have warned that individuals planning to retire by 2050 could see their annual pension income fall by as much as £800 compared with today’s retirees.
Pensions at Risk
According to data from the Department for Work and Pensions (DWP), nearly 45% of working-age adults are currently not contributing anything toward their pensions. Officials fear that the ongoing cost of living crisis is forcing households to prioritize immediate needs over long-term savings, putting millions at risk of inadequate retirement income.
Acknowledging the scale of the problem, Kendall admitted she was “under no illusions” about the challenges ahead. “Many workers are more concerned about putting food on the table and keeping a roof over their heads than saving for a retirement that seems a long, long way away,” she said. She added that businesses, too, are struggling to remain profitable in an unpredictable economic climate, making pension reform all the more urgent.
Reviving the Pension Commission
In her speech delivered in west London, Kendall confirmed she would reinstate the Pension Commission, originally launched in 2002 during Tony Blair’s premiership. The commission will be tasked with investigating why younger workers and self-employed people are saving less, and why the retirement outlook appears bleaker for future generations.
“Just because pensioner poverty has fallen does not mean all the problems have gone away,” Kendall argued.
She highlighted the significant gender gap in pension savings, revealing that women approaching retirement have just half the private pension wealth of men. On average, a woman in her late 50s can expect a private pension income of just over £100 a week, compared to £200 for men.
The self-employed are also at risk, with only one in five contributing to a private pension — a sharp decline from half in the late 1990s. This means more than three million self-employed people are making no retirement savings at all.
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The Struggles of Younger Generations
Kendall was especially vocal about the challenges facing younger workers, pointing to the housing crisis as a major barrier to saving. She said many young people “haven’t got a hope in hell of getting on the housing ladder” and are being “killed by rent.” These pressures, she warned, are fuelling what could become a “tsunami of pensioner poverty” in the decades ahead.
“Unless we act,” she said, “tomorrow’s pensioners will be poorer than today’s, because those who are saving aren’t saving enough — and almost half of working-age adults aren’t saving at all.”
The revived Pension Commission will explore policy options such as lowering the age and earnings threshold for automatic enrolment in workplace pensions. It is expected to publish its recommendations in 2027.
Triple Lock Protected
Despite the wide-ranging scope of the new review, Kendall was firm on one issue: the pensions triple lock. This mechanism ensures that the state pension rises annually in line with average earnings, inflation, or 2.5% — whichever is highest. Kendall stressed that the triple lock is “non-negotiable” and will remain “out of scope” for this review.
Asked whether businesses should prepare for higher pension contributions in addition to the national insurance increases introduced earlier this year, she was clear: “We’ve ruled out any increase in contributions, either from employers or employees, this parliament.” Instead, the commission’s focus will be on finding long-term solutions to strengthen retirement incomes through a combination of state and private pensions.
Political Responses
The announcement has already drawn reactions from across the political spectrum. Reform UK leader Nigel Farage warned that the state pension age will “inevitably” have to rise as life expectancy continues to increase.
Speaking at a press conference in Westminster, Farage said: “I share the concern with pensions being unaffordable on a national level, and I also share the concern at the absolute scandal of the private pensions industry, which has served people terribly but done frightfully well for itself. We’re going to have to face the reality that if people are living longer and longer, then inevitably retirement age is going to have to rise.”
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Looking Ahead
The Pension Commission is due to present its recommendations in 2027, two years before the formal review of the pension age reports back in March 2029. A Downing Street spokesperson described the pension age review as “routine” but emphasized that the government’s broader priority is addressing the savings crisis.
“The underlying principle is fixing the retirement savings gap and supporting working-age adults who currently cannot afford to save,” the spokesperson said.
As the cost of living continues to weigh heavily on households, and younger generations find themselves priced out of home ownership, the government faces mounting pressure to ensure that retirement security does not become a privilege reserved for the few.
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