{"id":681415,"date":"2026-05-20T07:33:08","date_gmt":"2026-05-20T07:33:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/681415\/"},"modified":"2026-05-20T07:33:08","modified_gmt":"2026-05-20T07:33:08","slug":"wednesday-briefing-why-millions-of-britons-face-a-pension-cliff-edge-pensions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/681415\/","title":{"rendered":"Wednesday briefing: Why millions of Britons face a pension cliff edge | Pensions"},"content":{"rendered":"

Good morning. I am going to whisper this gently so you don\u2019t get spooked back under the duvet \u2013 there is a good chance that you are one of at least 15 million Britons not saving adequately for retirement. That is according to a report published this week by the Pensions<\/a> Commission.<\/p>\n

The pensions \u201ccliff edge\u201d is no longer a distant warning; for many, it is becoming a reality. As the cost of living continues to bite, the dream of a comfortable retirement is being replaced by a pragmatic \u2013 and often scary \u2013 calculation of how long one might have to stay in the workforce. And many of us, it seems, are getting our numbers wrong.<\/p>\n

For today\u2019s newsletter, I spoke to business and financial journalist Elizabeth Anderson, and Paul Lewis, who presents Money Box on BBC Radio 4. I asked them how we as a nation have got ourselves into this situation, and how we should properly prepare for retirement. First, the headlines.<\/p>\n

Five big stories<\/p>\n

UK news | British homes will need air conditioning<\/a> to survive predicted levels of global heating, the government\u2019s climate advisers have warned in a report, as measures such as drawing curtains, opening windows and growing trees for shade are not likely to be enough.<\/p>\n

UK politics | Andy Burnham will face Reform UK\u2019s Robert Kenyon in next month\u2019s crucial Makerfield byelection<\/a> in a clash that could change the course of British politics for years to come.<\/p>\n

World news | Xi Jinping welcomed Russian president Vladimir Putin with pomp and pageantry as the pair kicked off talks<\/a> in the Great Hall of the People, days after the Chinese leader hosted Donald Trump in the same location.<\/p>\n

US news | The US vice-president, JD Vance, has urged anti-immigration activists <\/a>in the UK to \u201ckeep on going\u201d after tens of thousands gathered for a rally in London.<\/p>\n

Cost of living | UK supermarkets have been asked by the government to consider freezing the prices <\/a>of some essential foodstuffs to protect the public from inflation fuelled by the Middle East conflict.<\/p>\n

In depth: \u2018Doing nothing isn\u2019t an option\u2019Millions risk reaching retirement without enough savings to live comfortably. Photograph: PetaPix\/Alamy<\/p>\n

As our senior economics correspondent Richard Partington reported yesterday<\/a>, 15 million Britons are not adequately saving for retirement. Without action this figure could quickly rise to 19 million, according to the Pensions Commission.<\/p>\n

The crisis is particularly acute among low- to middle-earners and the self-employed, with only 4% of the latter group putting money into a pension at all. Auto-enrolment, introduced by the last Labour government and implemented by the coalition and Conservative administrations, has brought millions of employed workers into the pension system, but about half of those employees are putting only the minimum required amounts into their retirement funds \u2013 currently 8% of total earnings, split between employee and employer contributions.<\/p>\n

The report also exposed a staggering gender gap<\/a>, with women approaching retirement holding just half the private pension wealth of men. To address these systemic failings, the commission is calling for a \u201crenewed national settlement\u201d.<\/p>\n

Elizabeth Anderson, who has been writing about pensions and finance for more than a decade, tells me that sometimes she wonders if it is just the word \u201cpension\u201d that puts people off. \u201cHaving spoken to a lot of people about this over many years, a lot of people still don\u2019t really understand how pensions work,\u201d she says. \u201cPeople think it\u2019s something complicated and inaccessible, whereas effectively it\u2019s just a savings pot.\u201d<\/p>\n

Why has this happened and is the problem getting worse?<\/p>\n

In recent years, there has been a shift away from \u201cdefined benefit\u201d schemes \u2013 the gold-standard final salary pensions of previous generations, where you were guaranteed a set income for life after retirement \u2013 to \u201cdefined contribution\u201d schemes. This has caused major problems for retirement planning. In most modern schemes, you can only get out of your pension pot what has been put in, along with any interest that has accrued.<\/p>\n

As wages have stagnated and housing costs have swallowed a larger share of take-home pay, the \u201csurplus\u201d cash required to top up a private pension has simply evaporated for many households. With the state pension currently topping out at \u00a3241.30 a week, private pensions are vital.<\/p>\n

\u201cThat\u2019s the tragedy of auto-enrolment,\u201d Paul Lewis concludes. Minimum contribution levels are set at levels to make the schemes affordable for employers. \u201cIt\u2019s a great idea, and it\u2019s much better than having nothing, but it\u2019s simply not enough. These funds will be enough to keep you off means-tested benefits, which is good news for future governments, but they won\u2019t be enough to live on in any decent way.\u201d <\/p>\n

Why are we neglecting our pension pots?<\/p>\n

\u201cThere is a rule of thumb,\u201d Lewis says, \u201cthat you should save a percentage of your income equal to half the age you were when you started saving. If you start at 20, 10% of your income a year until you\u2019re 70 might be OK. If you start at 50, you\u2019d need to save 25% a year. Personally, I think those figures actually underestimate what is required.\u201d<\/p>\n

Anderson raises the cost of living in our conversation. She notes that if people are paying into a pension, they are locking that money away until they are at least 55. \u201cFor a lot of people, they need as much money as they can get right now.\u201d<\/p>\n

Lewis concurs. \u201cIt\u2019s very easy for me to say \u2018put more in\u2019, but if you\u2019re saving for a mortgage, buying food for children, or commuting, there\u2019s often nothing left. That is the worry. The arithmetically \u2018good\u2019 advice is almost impossible for many people to follow.\u201d According to the Resolution Foundation, the poorest working-age families have seen their incomes fall by \u00a31,800 per year since 2021-22.<\/p>\n

Still, Anderson tells me she is particularly surprised at the low number of self-employed people contributing to a pension scheme. \u201cFor the self-employed, saving into one is much more tax-efficient because you get tax relief. To put it simply: if you put \u00a310,000 of your earnings into a pension, the whole lot goes in (subject to allowances). If you took that as income, you\u2019d be paying tax and national insurance; if you\u2019re a higher-rate taxpayer, you could lose almost 50% of it. It\u2019s just a way of saving tax-efficiently for the future.\u201d<\/p>\n

What should you be doing?<\/p>\n

Lewis offers the slightly impractical advice of going back in time and starting to save earlier, which, it must be said, isn\u2019t particularly comforting. Especially at my age when I\u2019d need to go back to the last century to adjust spending habits sufficiently to counteract the amount of money I foolishly frittered away in my youth.<\/p>\n

There is a wealth of advice out there. Sandra Haurant wrote for us<\/a> that people shouldn\u2019t panic during turbulent times, and should prioritise sticking with paying into their pension. She advises that you should resist opting out of your work\u2019s pension scheme, and instead consider contributing extra where you can. In many schemes, greater personal contributions trigger an increase in those from your employer. For the self-employed, a stakeholder pension \u2013 a retirement plan with capped annual charges and a minimum monthly contribution of \u00a320 \u2013 is well worth considering.<\/p>\n

The government-backed MoneyHelper website has a section dedicated to advising people on pensions<\/a>, with the chance to make appointments to speak to an expert, a calculator to help you work out what you can afford to pay and what you can expect to receive, and clear explanations of what types of pension<\/a> there are.<\/p>\n

And, if you want to give your finances an entire overhaul, at the turn of the year our money and consumer editor Hilary Osborne, among others, put together this list of 26 apps and tools to help with your money planning<\/a>.<\/p>\n

What should the government be doing?<\/p>\n

In publishing its interim report, pensions commissioner Jeannie Drake said<\/a>: \u201cThe recommendations we present in our final report will address the need to secure adequate income in later life and a pension system that is fit for decades to come.\u201d<\/p>\n

Lewis suggests that real reform will be a tough sell to UK businesses. \u201cIt is almost impossible to contemplate making employers pay more right now because they have so many extra costs and businesses are struggling. I don\u2019t see that happening politically in the near future.\u201d<\/p>\n

The report offers an interim conclusion to government, suggesting ministers face a brutal three-way choice: hike taxes to fund a growing elderly population, force both individuals and employers to cough up significantly higher contributions, or further hike the retirement age (for Britain\u2019s younger workers, the state pension age is due to rise to 68). It is an unenviable \u201cpick-your-poison\u201d scenario for any politician, but with four in 10 people currently under-saving, \u201cdoing nothing\u201d isn\u2019t an option.<\/p>\n

For now, it\u2019s on us. \u201cThe first easy step for most people,\u201d Anderson says, \u201cis just to find out exactly how much you have.\u201d<\/p>\n

\u201cIf people check, they might have a pleasant surprise, especially if they\u2019ve been paying in for a long time and compound interest has helped it grow. The earlier you start, the more time it has to compound.\u201d<\/p>\n

What else we\u2019ve enjoyedA Chinese woman and a young girl at a shopping centre selling Russian goods in Suifenhe, China. Photograph: Gilles Sabri\u00e9\/The Guardian<\/p>\n

In her dispatch from Suifenhe in north-east China, which borders Russia, Amy Hawkins explores<\/a> how trade and tourism are rapidly evolving in this border town, and what it tells us about the changing relationship between Beijing and Moscow. Michael Segalov, newsletters team<\/p>\n

My parents sometimes said: \u201cWho\u2019s that, Whistler\u2019s mother?\u201d, which was baffling as a child. The painting that inspired the phrase is on loan in London as part of a James McNeill Whistler retrospective, reviewed by Jonathan Jones<\/a>. Martin<\/p>\n

Post-pandemic, millions more of us have dogs, and we are bringing them everywhere. Not everyone, however, is thrilled at the proliferation of pets in our public spaces, myself included. I enjoyed Emine Saner\u2019s reporting<\/a> on Britain\u2019s plague of pooches. Michael<\/p>\n

The story of a student<\/a> forced to drop a class, pick up a job and navigate a complicated financial aid system after her father was detained by ICE during her second semester at Cornell. Martin<\/p>\n

Stretching across the African continent, the Sahel region south of the Sahara has seen approximately half of all global deaths from terrorism for three years running. In 2007, that figure was under 1%. This meticulously researched interactive story<\/a> examines the data and the specific challenges facing Nigeria. Michael<\/p>\n

SportBukayo Saka and Gabriel Magalh\u00e3es celebrate after watching Arsenal\u2019s title triumph Photograph: Stuart MacFarlane\/Arsenal FC\/Getty Images<\/p>\n

Football | Arsenal are Premier League champions<\/a> for the first time since Ars\u00e8ne Wenger\u2019s Invincibles in 2004, after Manchester City drew 1-1 at Bournemouth.<\/p>\n

Football | Southampton could face a legal claim<\/a> from their players for loss of earnings after the club were expelled from the Championship playoff final for spying on training sessions staged by Middlesbrough and two other second-tier rivals.<\/p>\n

Tennis | Carlos Alcaraz has been forced to withdraw<\/a> from Wimbledon as he continues his recovery from the wrist injury that will force him out of action for at least three months during the most significant part of the tennis season.<\/p>\n

The front pages Photograph: The Guardian<\/p>\n

\u201cUK must get used to being a hot country, climate advisers warn\u201d, is the story leading the Guardian today.<\/p>\n

The Times says \u201cMilk, egg and bread prices could be frozen\u201d, the Telegraph\u2019s take is \u201cReeves tells shops to cap food prices\u201d, and the FT writes \u201cTreasury asks supermarkets to cap prices on staple foods\u201d.<\/p>\n

The i Paper runs with \u201cCabinet ministers woo Burnham in race for top jobs\u201d, while the Mail says \u201cBurnham said that men who identify as women should be able to use female toilets\u201d. The Express says \u201cEnergy bills to soar by \u00a3200 in \u2018another failed promise\u2019\u201d.<\/p>\n

The Sun splashes on \u201cMarried at First Sight axed\u201d and on the same story Metro says \u201cIn hindsight, no wonder it went wrong\u201d. The Mirror\u2019s lead story is \u201cKylie: my secret cancer battle\u201d.<\/p>\n

Today in FocusVenezuelans spoke of their anxiety after the political shift. Photograph: Andrea Hern\u00e1ndez Brice\u00f1o\/The Guardian<\/p>\n

Did Trump really rescue Venezuela?<\/p>\n

The Guardian\u2019s Latin America correspondent, Tom Phillips, on life in the country <\/a>four months after the US abduction of the former president Nicol\u00e1s Maduro.<\/p>\n

Cartoon of the day | Ella Baron Illustration: Ella Baron\/The GuardianThe Upside<\/p>\n

A bit of good news to remind you that the world\u2019s not all bad<\/p>\n

Fragrant star jasmine, one of the plants in the Sightsavers sensory garden. Photograph: Iurii Garmash\/Getty\/iStockphoto<\/p>\n

The Chelsea flower show began yesterday with a curious addition to the more typical displays of flora that visitors have become accustomed to each year. Filled with the scent of jasmine and the pleasant textures of dill and thyme, the Sightsavers sensory garden<\/a> aims to be \u201can accessible, inclusive space\u201d that encourages people to feel, taste and touch the plants \u2013 or even hear them, courtesy of a soundscape devised from their bioelectric signals.<\/p>\n

Janice Molyneux, one of the designers, said: \u201cIf you were to shut your eyes, you could feel and smell your way around the garden.\u201d At its centre is a steel halo structure that collects rainwater, creating a \u201crelaxing, natural sound\u201d as it does so. The garden\u2019s ethos is modelled on the charitable work that Sightsavers does across more than 30 countries, supporting people experiencing sensory loss.<\/p>\n

Sign up here<\/a> for a weekly roundup of The Upside, sent to you every Sunday<\/p>\n

Bored at work?<\/p>\n

And finally, the Guardian\u2019s puzzles are here to keep you entertained throughout the day. Until tomorrow.<\/p>\n","protected":false},"excerpt":{"rendered":"Good morning. I am going to whisper this gently so you don\u2019t get spooked back under the duvet…\n","protected":false},"author":2,"featured_media":681416,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":["post-681415","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-finance","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/681415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=681415"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/681415\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/681416"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=681415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=681415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=681415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}