Millions risk being 'condemned to retirement poverty' unless the UK’s pensions system is overhauled, PensionBee has warned, as it called on the Pensions Commission to deliver bold reforms to tackle structural inequalities.

The government relaunched the Pensions Commission earlier this year, as part of its work to explore the barriers stopping people from saving enough for retirement, with the commission set to share its final report in 2027.

In a letter to the commission, PensionBee argued that women, unpaid carers, the self-employed and lower-paid workers are being “locked out” of the progress achieved through auto-enrolment.

It also said others are being held back by a pensions market that remains “too complex and sluggish” to navigate.

Lengthy transfer delays, lost pension pots and poor consumer processes are preventing people from taking control of their savings, the provider warned, compounding the disadvantages faced by those on lower incomes or in insecure work.

The firm pointed to evidence that the self-employed pensions gap is widening, with over 80 per cent of self-employed workers not saving into a pension, according to Department for Work and Pensions (DWP) data.

Meanwhile, its own research suggested that 60 per cent of self-employed workers without a pension cite affordability as the main obstacle, while nearly 70 per cent of gig workers say they would support universal pension inclusion.

In addition, unpaid carers were described as facing a “retirement penalty”, with each year out of paid work estimated to reduce their pension pots by £5,000, resulting in those who spend several years in caring roles retiring with as much as £30,000 less than their peers who remain in the workforce.

The report also highlighted the gender pensions gap, with women contributing 27 per cent less into their pensions per quarter than men, and entering their 50s with pension pots half the size of their male counterparts.

Only 24 per cent of women feel a great deal of control over their pensions, compared to 37 per cent of men.

To address these inequalities, PensionBee urged the commission to set out a clear path towards higher default auto-enrolment rates.

It also called for auto-enrolment to be expanded to groups currently excluded, including younger workers, lower earners and those in multiple part-time roles.

According to the firm, this would directly address systemic barriers that disproportionately affect women, carers and ethnic minorities.

The letter further pressed for automatic pension deductions through the self-assessment tax system to support the self-employed, alongside reforms to make pension transfers faster and simpler, with providers held accountable for delays.

PensionBee chief business officer UK, Lisa Picardo, warned that “tomorrow’s retirees are on track to be poorer than today’s unless immediate action is taken”.

She said the current system “is simply not working for millions of people, and it’s those who need support the most who are paying the price”.

Women, carers and the self-employed, Picardo continued, “have been consistently overlooked” and now risk being condemned to a poorer retirement.

She argued that this is “not inevitable”, stressing that “we know what the problems are, and we know how to fix them”.

Picardo said the Commission has a “once-in-a-generation chance” to reshape the system so that it is “fit for purpose and works for everyone”.

This, she suggested, should include expanding auto-enrolment, providing the self-employed with a simple way to save, and addressing what she described as a “broken pension transfer system”.

“A fair and inclusive pensions system isn’t just good policy - it’s a moral necessity,” Picardo added.

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