People retiring by 2050 could see significantly reduced retirement incomes compared to today’s pensioners unless urgent steps are taken to boost private pension saving, the government has warned. In response, the Department for Work and Pensions (DWP) is reviving the influential Pensions Commission to explore ways of encouraging better retirement planning across all sectors of the population.

The warning comes as figures show nearly half of working-age adults are not saving into a private pension, with the self-employed, low earners, and certain ethnic groups – including Pakistani and Bangladeshi communities – among the least likely to be contributing. Women are also falling behind, with a stark 48% gap in pension wealth compared to men.

Despite the success of auto-enrolment, which has raised workplace pension participation to 88%, new data reveals major disparities remain. More than three million self-employed people are saving nothing for retirement, and just one in four low earners in the private sector are contributing. Without reform, those retiring in 2050 could see an annual income drop of around £800.

The reformed Commission will examine the barriers to saving and suggest strategies to improve future pension outcomes. Alongside this, two independent reviews into the state pension age are now underway, as the government grapples with the long-term affordability of the state pension and its triple lock policy.