As 12.5 million people in the UK undersave for retirement, a delayed pension adequacy review raises important questions.

While today’s retirees are relatively well-off, the same may not hold true for future generations, including those without defined benefit (DB) provision, navigating housing pressures, student debt and gig economy instability.

With an understandable reluctance to increase employer costs following National Insurance hikes and wider economic uncertainty, alternative solutions must be explored.

Auto-escalation of contributions, or phased approaches for new hires, could help boost savings without hurting business.

Automatic enrolment has proven a success, but today’s workers face more personal risk than those with DB schemes of the past. Poor investment decisions, or no decisions at all, can leave savers exposed.

Worryingly, self-employed workers are falling even further behind. Only 20 per cent are paying into a private pension, compared to 60 per cent in 1998. Integrating pension saving into the self-assessment system could help close the gap.

To reverse the trend, we must think bigger: A joined-up approach to savings, extending enrolment to younger and lower earners, better default decumulation pathways, and the
modernising of communication to suit today’s diverse workforce.

Above all, financial education is key, from an early age. If people truly understood the consequences of undersaving, they might act sooner.

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