\u201cWe are going to complete the job,\u201d he said ahead of the launch of a commission to examine options to boost pension savings and broaden the number of people setting money aside for retirement.<\/p>\n
Bell warned that the country was on track to move backwards on pensions<\/a> adequacy with young people, lower earners, the self-employed and people from Pakistani and Bangladeshi backgrounds particularly exposed, adding that the problem was \u201cmassive\u201d.<\/p>\n He said the commission was expected to report within 18 months and he was hopeful that political consensus could be built around long-term reforms. <\/p>\n The new commission will be led by Baroness Jeannie Drake, who served on the Turner commission, alongside Nick Pearce of Bath university and former Kingfisher chief executive Sir Ian Cheshire.\u00a0<\/p>\n Chancellor Rachel Reeves said last summer that the review into pensions adequacy would launch by the end of the year, but it was delayed <\/a>as she tackled a backlash to an increase in employer national insurance contributions in the October Budget.<\/p>\n \u201cStuff is going to happen,\u201d Bell said. \u201cEveryone knows we have to move.\u201d<\/p>\n However, he reassured employers and staff that the changes would not be rushed. \u201cWe are ruling out any increase in pension contributions in this parliament. I want everyone to focus on what is the right, long-term answer.\u201d<\/p>\n Among the areas to tackle are inadequate levels of pension savings, but also gaps in the population of savers. \u201cForty-five per cent of working-age adults are saving nothing at all,\u201d Bell said.\u00a0<\/p>\n Only one in five of the self-employed were saving for pensions, compared with half at the end of the 1990s, Bell added. Lower earners and young people were also \u201chugely disproportionately likely to be not saving\u201d, he said.\u00a0<\/p>\n Private pension incomes were on track to be 8 per cent lower by 2050, expressed in today\u2019s earnings terms, according to new modelling by the Department for Work and Pensions to be published on Monday. The decline comes as the UK continues to transition from defined benefit to defined contribution schemes. <\/p>\n \u201cIf we don\u2019t do anything, too many of tomorrow\u2019s pensioners, who are today\u2019s workers, will be poor in retirement. That would be a bad legacy for this generation of policymakers,\u201d said Bell.<\/p>\n The commission will build on the work of the body led by Lord Adair Turner, which reported in 2005 and paved the way to automatic enrolment for most workers. Its output was among the \u201cbiggest policy successes of this century so far\u201d, Bell argued, ranking it alongside the minimum wage.\u00a0<\/p>\n When it came to pension contribution rates, Bell said\u00a0it was \u201cblindingly obvious\u201d that this would be one of the areas that the commissioners would want to look at.\u00a0<\/p>\n Under current auto-enrolment rules, staff and employers combined must pay at least 8 per cent of qualifying earnings into workplace pensions each year, with a minimum of 3 per cent coming from employers. <\/p>\n While there had been talk about boosting contributions from 8 per cent to 12 per cent, Bell said some of the modelling in this area had been \u201coverly simplistic\u201d because it did not take into account returns and did not look at households as a whole.\u00a0\u00a0<\/p>\n Analysis on savings rates is sometimes overly focused on what higher earners need to put aside, because \u201cthat is where the state pension does least of the work as a share of their replacement rates\u201d, he said.\u00a0<\/p>\n \u201cGovernment\u2019s job is to be sure you have a system delivering for lower and middle earners.\u201d\u00a0<\/p>\n Research from the Institute for Fiscal Studies think-tank found that while only 10 per cent of eligible white employees were not participating in a pension plan, the figure rises to 16 per cent and 24 per cent for those from Pakistan and Bangladesh, respectively. <\/p>\n The IFS found that religious beliefs were an \u201cimportant\u201d factor behind higher opt out-rates, despite most DC schemes offering sharia-compliant options. Islamic teaching says no interest income may be received and investments may not be in \u201cunethical\u201d industries such as alcohol or tobacco.<\/p>\n The government will also appoint Suzy Morrissey of the Pensions Policy Institute to conduct an expert review of the state pension age. The age is already due to rise to 67 between 2026 and 2028.\u00a0<\/p>\n Recommended<\/p>\n![\"Torsten](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/07\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/215f77d4-baa4-47f9-91b2-2a6e20986da0.jpg\")
Pensions minister Torsten Bell: \u2018We are ruling out any increase in pension contributions in this parliament. I want everyone to focus on what is the right, long-term answer\u2019 \u00a9 Mark Thomas\/Alamy<\/p>\n
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