22 July 2025, 09:36 | Updated: 22 July 2025, 09:39
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Getty
The government is set to review state pensions due to fears that Britons are now saving enough for their retirement.
Liz Kendall announced on Monday that Labour is set to revive the pensions commission to provide recommendations for how to boost retirement income from 2027 to avert a crisis.
The work and pensions secretary also announced the next statutory government review into the pension age.
Under current projections, those looking to retire in 2050 are set to receive £800 per year less than current pensioners – despite soaring levels of inflation.
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Ms Kendall said: “Put simply, unless we act, tomorrow’s pensioners will be poorer than today’s, because people who are saving aren’t saving enough for their retirement.
“And crucially, because almost half of the working age population isn’t saving anything for their retirement at all.”
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The statistics break down to show that more than three million who are self-employed are saving into pensions, while only one-in-four low earners in the private sector are.
Here is what the government is set to do.
Pensions schemers bill and pension megafunds
The pension schemes bill and the creation of pension megafunds mean an average earner could get a £29,000 boost to their pension pots – the government says.
Announced previously, in June, the bill is expected to help 20 million workers by breaking down their pensions and making them easier to view and keep tabs on.
The bill had its second reading in July and is expected to get rubber stamped in September.
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Alamy
What are megafunds?
Megafunds were announced by chancellor Rachel Reeves in November 2024 and will be created by consolidating two main types of pension schemes.
“These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential,” the government says.
Relaunching the pensions commission
Two decades after it stopped, the government is set to revive its pensions commission to “examine the pension system as a whole and look at what is required to build a future-proof pension system that is strong, fair and sustainable”.
The review is due in 2027 and is set to complete a comprehensive review as to how people can be helped to save for their retirement.
Minister for pensions, Torsten Bell, said: “The original pensions commission helped get pension saving up and pensioner poverty down.
“But if we carry on as we are, tomorrow’s retirees risk being poorer than today’s. So we are reviving the pensions commission to finish the job and give today’s workers secure retirements to look forward to.”
Ms Kendall added: “The [original] commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place.”
The commission will be made up of Baroness Jeannie Drake (a member of the original Commission), Sir Ian Cheshire and Professor Nick Pearce, who will be responsible for steering its work.