LONDON, May 19 (Xinhua) -- Millions of people in Britain could face a sharp fall in living standards when they retire, as many are either not saving enough or not saving into a pension at all, the Pensions Commission warned on Tuesday.
In an interim report on the state of retirement saving in Britain, the commission said 15 million people are currently undersaving for retirement, a number that could rise to 19 million without action. It warned that large groups across the country risk facing a "severe cliff-edge" when they retire.
The report said low and middle earners, the self-employed and women are among those most exposed to retirement insecurity, as the current pension system has not kept pace with changes in working lives.
The scale of the challenge is also reflected in pension coverage. According to the commission, 45 percent of working-age adults, or around 18 million people, are not saving into a pension at all, although nearly half of them are in work. Only 4 percent of wholly self-employed workers are saving for retirement, with the proportion even lower among younger self-employed people.
The commission also warned that many people are drawing on private pension savings too early. On current trends, around 3 in 10 private pension pots are accessed at the earliest possible opportunity, with half withdrawn in full. Nearly half of these withdrawals are spent on large expenses such as cars, holidays or home renovations, the report said.
The Pensions Commission was set up by the government in July 2025 to make recommendations on how to improve retirement outcomes. Its final report is expected in early 2027.
Pensions Commissioner Jeannie Drake said pensions reform over the past two decades had been a success, but further action was needed.
"This demands a renewed national settlement on pensions," Drake said, adding that the commission's final recommendations would seek to secure adequate income in later life and build a pension system "fit for decades to come."
The government said the commission's findings would guide further work on improving retirement outcomes. It said any recommendations for change should be implemented gradually, and that the government had ruled out changes to automatic enrolment contributions during this Parliament.
Paul Nowak, general secretary of the Trades Union Congress, said millions of workers on low and middle incomes were still not on course for a decent retirement, with women, Black and minority ethnic workers, disabled workers and people in the gig economy facing the highest risks.
"The commission must now develop a bold plan to fix this, which will need to include higher employer contributions and a fair deal for those currently missing out," he said.
Caroline Abrahams, charity director at Age UK, said the report showed the need to improve how the state pension and private pension systems work together.
"Otherwise people on low incomes are at risk of falling through the cracks and hurtling towards their retirements without the required funds, or the time to make up the shortfall," she said. ■