Pensions Commission highlights growing retirement gap for the self-employed

An interim report from the Pensions Commission has found that only 4% of self-employed individuals are saving for their retirement, with that figure even lower for younger people.

Pensions Commission highlights growing retirement gap for the self-employed

An interim report from the Pensions Commission has found that only 4% of self-employed individuals are saving for their retirement, with that figure even lower for younger people.

The commission, re-established by the Government in July 2025, has been tasked with assessing the state of retirement savings and recommending solutions to address the growing risk of insufficient pension provision. Its original work between 2002 to 2006 was instrumental in shaping automatic enrolment, helping to drive a step change in pension participation across the UK.

However, the latest findings indicate that many individuals - particularly the self‑employed remain at risk of under-saving for retirement.

Key findings from the report

In addition to the self-employed savings gap, the report highlights several broader challenges across the UK pensions landscape:

Millions are under saving: 15 million people are currently not saving enough for retirement – with this figure projected to rise to 19 million people if no action is taken
Reliance on minimum contributions: Almost half of low- and middle-earners are saving at the minimum automatic enrolment levels, with no other form of savings
Low overall participation: 45% of adults at working age are not saving into a pension, despite almost half of them being in employment
Early pension access: Around 30% of private pensions are accessed at the earliest opportunity, with half of these taken out in full.

The Commission’s final report, including recommendations to improve the country’s saving habits, will be published in early 2027.

What you can do now

While policy changes may follow, there are practical steps individuals can take to strengthen their retirement position:

Understand your current position

Bring together all sources of retirement income - including workplace and personal pensions, savings, investments and your expected State Pension. This will help you assess whether you are on track to meet your desired lifestyle in retirement.

Contribute consistently - and review regularly

Regularly contributing to your pension is one of the most effective ways to build long-term retirement savings. Reviewing your contribution levels periodically - especially following changes in income, career progression or personal circumstances – can help keep your plans on track.

Make the most of tax reliefs and allowances

Pensions can offer tax advantages, including tax relief on contributions and tax-efficient growth, although these are subject to change. Understanding how these incentives work and how they can be applied to your specific circumstances can help ensure you are making informed decisions about where and how to save.

Take a long-term view on investments

Investment strategy can play a key role in retirement planning. For many individuals, maintaining a diversified approach and reviewing performance periodically can help manage risk and support long-term growth.

Plan how and when to access your retirement savings

Decisions around when to access pensions, whether to take lump sums, and how to generate a sustainable income can have lasting financial implications. Considering these decisions in advance can help avoid unnecessary tax exposure and support a more stable retirement income.

Consider your wider financial position

Retirement planning should be viewed alongside other factors such as savings outside of pensions, property, debt, and estate planning. As these can all influence your financial security in later life, taking a holistic view can help ensure that different elements of your finances are working together effectively.