The UK’s savings system is “at a tipping point”, with millions of people financially vulnerable and pension adequacy “deeply unequal”, according to Pensions Management Institute (PMI) chief executive, Gareth Tancred.

Writing in a blog for the PMI, Tancred warned that the UK faces a “social imperative” to fix its fragmented savings system, with too many people forced to choose between saving for retirement and meeting immediate costs such as housing or emergency expenses.

Research from the PMI’s Lifetime Savings Initiative (LSI) found that the average UK saver holds just £16,067 in savings, while one in 10 have no cash savings at all.

A further 21 per cent have less than £1,000 set aside for emergencies, and one in four are classed as having low financial resilience.

Consequently, only 36 per cent of people feel on track for a comfortable retirement, with pension adequacy falling to just 8 per cent among the lowest-income households.

“These figures paint a stark picture,” Tancred said.

“The UK savings system is fragmented and unequal, and too many people are falling through the cracks.”

He added that the revival of the Pensions Commission reflected the scale of the challenge, emphasising that the PMI was committed to driving solutions through industry collaboration and professional development.

“Real change starts with fearless debate,” he added. “That’s why we created the LSI - to ask difficult questions, challenge assumptions, and rebuild a system that reflects real people’s lives.”

As part of its work, the LSI has identified three “critical pressure points” shaping long-term financial outcomes: resilience, housing access, and retirement adequacy.

Drawing on behavioural and qualitative data, the project mapped how individuals move through different financial “zones” over time, showing that existing models fail to reflect the volatility many households experience.

Tancred said the traditional approach of locking money away for decades “simply doesn’t work for everyone”, and called for policy frameworks that “reflect people’s lived experiences, not idealised savings journeys”.

With this in mind, the LSI’s first-year findings have also informed a series of policy ideas, including integrated savings products that combine short-term flexibility with long-term investment; contribution-smoothing mechanisms to help people save through periods of
income volatility or career breaks; and digital tools that allow savers to manage multiple goals through one platform.

Tancred claimed this co-design approach, which brings together regulators, fintech firms, consumer advocates, and policymakers, represented “a more agile, inclusive” model for reform.

“The LSI is about provoking bold debate and influencing the Pensions Commission,” he continued. “

We’re not just talking about contributions in and money out, but about what happens to those contributions over time, and what that means for savers.”

He highlighted Nest's sidecar savings model as one example of how behavioural nudges can support broader financial resilience, but said far greater innovation will be needed to help people balance short and long-term priorities.

“Future generations face pension incomes that are too low, risks that are too high, and a system that remains unequal,” Tancred warned.

“Even small amounts set aside can make a difference - but only if the system supports them.”

Tancred concluded that the LSI’s research has already demonstrated how fragmented systems fail savers and confirmed that the PMI plans to expand its work into new areas that influence financial well-being.

“At the PMI, we’re not just observers in the pensions debate,” he stressed.

“We’re active participants - shaping the future of savings policy and building the next generation of pension professionals ready to meet a complex future.”

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