The UK government’s revived Pensions Commission faces a “tough path ahead” if it is to replicate the success of the Turner Commission in improving retirement outcomes for UK workers, according to analysis from Aon.

The 2025 Commission, chaired by Baroness Jeannie Drake, was launched in July with the aim of improving retirement adequacy, amid growing concerns that even those saving into a pension are “generally not saving enough for a reasonable retirement”.

The commission marks the first major review of the UK’s pensions framework in nearly two decades, drawing clear parallels with the original Turner Commission, which ran between 2002 and 2006 and ultimately paved the way for automatic enrolment and the creation of NEST.

Aon’s analysis report, titled Improving Retirement Outcomes -The Drake Commission, welcomed the government’s renewed focus on retirement adequacy but warned that the commission’s remit and constraints mean its task “will not be straightforward”.

Subsequently, the firm identified six key challenges that the commission must overcome to deliver meaningful reform.

It said a primary concern is the commission’s limited scope to review the state pension.

Aon noted that the commission's terms of reference instruct it to “build on the foundation of the state pension” rather than consider reforms to it directly, which the firm warned could prevent the commission from addressing “the most significant driver of retirement outcomes for those at greatest risk”.

This restriction, the report said, risks producing recommendations that do not fully tackle the root causes of pensioner poverty or retirement inadequacy.

Aon also highlighted the inherent difficulty in defining what constitutes an ‘adequate’ pension, given the wide range of individual circumstances that influence retirement needs, such as income level, home ownership, and health.

The report questioned whether adequacy should be based on replacement ratios, as has traditionally been the case, or on absolute spending levels, such as those outlined in Pension UK's Retirement Living Standards.

Nuanced and flexible solutions, it added, will be needed to reflect the diversity of savers.

Meanwhile, the report said a key challenge for the commission will be finding ways to improve outcomes for low earners without imposing excessive savings requirements.

Aon cautioned that simply raising automatic enrolment minimum contributions could be “counterproductive” if it reduces take-home pay without materially improving long-term security.

Policy solutions, the report argued, must be “carefully calibrated to avoid imposing unnecessary savings burdens on the already financially vulnerable”.

The analysis also called for greater focus on the long-term sustainability of the state pension, given the demographic pressures of an ageing population, and suggested that the government should do more to promote the option of deferring payments.

Improving financial literacy and engagement was highlighted as another critical factor, though Aon warned that the commission’s narrow policy focus could limit its ability to influence broader education efforts.

Nonetheless, it stressed that better understanding and engagement “underpins the effectiveness of any pension reforms” and helps individuals make informed choices about their retirement.

Aon concluded by calling for more frequent formal reviews of the UK pensions system to ensure it remains responsive to demographic and market change, recommending that another commission be convened within the next decade.

“The challenges are significant, including the decline of defined benefit (DB) pensions, the rise of collective defined contribution (CDC) schemes, technological advancements, and the increasing age profile of the workforce,” said Aon head of UK retirement policy, Matthew Arends.

“Ongoing oversight and periodic commissions are essential to maintain a pensions framework that is strong, fair, and sustainable for future generations.”

The report follows growing industry debate around the commission’s scope and ambitions.

Many industry figures have welcomed its focus on adequacy but have warned that progress will depend on the government’s willingness to tackle politically sensitive questions around contributions, incentives, and the role of the state pension.

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