The Department for Work and Pensions (DWP) has issued a stark warning about the retirement savings shortfall among millions of self-employed workers in the UK. Pensions Minister Torsten Bell highlighted that just four per cent of those relying solely on self-employment income are actively contributing to a pension, a figure he described as “a catastrophe.”
Speaking at The Investing and Saving Alliance Annual Retirement Conference 2026, Bell emphasized the gravity of the situation facing the 4.57 million self-employed individuals, according to Office for National Statistics (ONS) data. He contrasted this with the wider working-age population, noting that only 55 per cent overall are saving into a pension.
Bell remarked, “Our job is to ensure the pension system builds on the success of automatic enrolment.” However, he pointed out the current disconnect, saying, “At the moment, many people don’t engage with pensions until they approach retirement age, when they suddenly need to become financial experts.”
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The Minister stressed that the government has effectively compelled the British public to save for pensions, and now it must safeguard good returns on those investments.
To address these concerns, the government established the Pensions Commission in July 2025, which is slated to deliver its final recommendations in early 2027. The Commission’s mandate is to tackle the longstanding challenge of pension adequacy and prevent future retirees from being worse off than today’s generation.
Baroness Jeannie Drake, Pensions Commissioner, acknowledged past reforms’ successes while warning about ongoing risks: “Many people are not saving enough, and millions not saving at all. This demands a renewed national settlement on pensions,” she said.
Drake added that the Commission’s final report aims to present solutions ensuring adequate retirement income and a pension system robust enough to serve future generations.