Towards the end of July 2025, the government announced the revival of the Pensions Commission. This follows recent analysis undertaken by the Department of Work and Pensions. Here we’ll discuss the Commission’s objective, what prompted the decision to revive it and what ministers are saying about it.

The first Pensions Commission

The last Labour government established the first Pensions Commission in 2002. It’s final report was published in November 2005, and led to the roll-out of workplace auto-enrolment. You can find out more about auto-enrolment into workplace pensions in our recent blog post. Prior to its introduction in 2012, only 55% of eligible employees were saving into private pensions. As of 2023, this has significantly increased to 88%, with over 22 million workers saving each month.

This first Pensions Commission laid the groundwork for a new pensions landscape, that today’s government is keen to build on.

Why a revived Commission is needed

The Department of Work and Pensions has recently undertaken analysis of the pensions landscape in the UK. The findings led the government to warn that people retiring in 25 years time will be 8% worse off than pensioners today, unless action is taken. The analysis found that about half of working age adults are not saving into private pensions. The least likely groups to be saving into private pensions are low earners and the self-employed. This is particularly the case for women and some ethnic groups.

Detail of analysis findings

In 1998, 48% of self-employed workers were saving into a pension. This has now fallen to less than 20%. That equates to over 3 million self-employed workers without private pensions. In similarly worrying findings, only 25% of low earners in the private sector are investing in private pensions. Similarly only 25% of those with Pakistani or Bangladeshi heritage are saving into private pensions.

The current gender gap in private pensions amongst those currently retiring, sits at 48%. What this means is that women are receiving an average of just over £100 per week from private pensions. Men, on the other hand, will receive an average from £200 per week.

It’s not all negative, though! Overall, the percentage of retirees that are solely dependent on income from the State Pension and pension benefits has fallen. The data shows that it has fallen from 14% to 13% since the first Pensions Commission. This was the aim of the Commission and so in many ways it was successful. However the government sees a new need to encourage savings into personal pension arrangements.

Retirement living standards

Each year the Pensions and Lifetime Savings Association (PLSA) calculate the average funds required for different standards of retirement. This is known as the Retirement Living Standards. In June 2025, the calculations showed:

Single person household

Minimum lifestyle: £13,400

Moderate lifestyle: £31,700

Comfortable lifestyle: £43,900

Two-person household

Minimum lifestyle: £21,600

Moderate lifestyle: £43,900

Comfortable lifestyle: £60,600

Whilst this estimates the annual income required, depending on when you choose to retire will determine how much you need in your pot to fully fund your retirement. Those choosing to retire early at age 60, for example, will require more funds than those working until State pension age.

Catherine Frost is the director of the Standard Life Centre for the Future of Retirement think tank. She has found that there are 17 million people not currently saving enough for the retirement they wished to have. The government’s analysis backs this. It found that 1 in 8 workers are not on track for a minimum retirement lifestyle, in terms of funding and that 3 in 4 workers are not on track for a moderate lifestyle, either. Especially for those who have become accustomed to a moderate/comfortable lifestyle while working, a decrease in your income and standard of living in retirement may not be acceptable. So it is essential to ensure your pension provisions are sufficient.

The pensions landscape described above, and found in the recent analysis, spurred the government’s Commission revival on.

The Pensions Commission revival and its objectives

The Department of Work and Pensions has called for the relaunch of the Pensions Commission. The Commission will be overseen by Baroness Jeannie Drake, Sir Ian Cheshire and Professor Nick Pearce. It will bring together trade unions, employers and independent experts.

The Minister for Pensions, Torsten Bell, has outlined the Commission’s clear objective. It is to build “a strong, fair and sustainable pension system fit for the middle of the 21st Century”. The Commission will not address the cost of the State pension and any changes to the Triple Lock. It will also not review the state pension age which is currently 66, and set to rise to 68 by 2046. The government have, however, commissioned two independent reports concerning state pension age. One will be carried out by the Pensions Policy Institute and the other by the government’s actuary department.

The Commission will report in 2027. This report will explore what is preventing workers from saving sufficiently into retirement pots. Recommendations will also be made for future-proofing the pensions system.

What ministers say

A number of government ministers have spoken about the revival of the Pensions Commission. Work and Pensions Secretary Liz Kendall spoke of the decision to revive the Commission “to tackle the barriers that stop too many saving in the first place”.

Rachel Reeves, Chancellor of the Exchequer, wants to make “pensions work for Britain”. She speaks of “going further to ensure that people can look forward to a comfortable retirement”.

Torsten Bell outlined that the government has revived the Pensions Commission to “finish the job and give today’s workers secure retirements to look forward to”.

Private pensions with Willday Wealth Management

The statistics outlined by the Department of Work and Pensions’ recent analysis are thought-provoking to say the least. Don’t wait for the new Commission’s report in 2027! Talk to us about investing in a private pension today!

Retire your way with a tax-efficient, well diversified private pension built around your desired retirement*. Our team will manage your pension portfolio around your target retirement date and appropriate risk profile, while aiming to maximise your investment returns. Get in touch today over the phone on 0116 222 0119, by email (hi@willdaywm.co.uk), or pop into the office so we can help you get the most from your financial planning.

*With investing, your capital is at risk and you may get less than what you invested.