The future of pensions: research round-up
At the start of this month the Pensions and Lifetime Savings Association changed its name to Pensions UK, as part of a five-year strategy to reflect the evolving landscape.
The not-for-profit representative and advocate for UK pensions has rebranded to reflect an industry entering a defining period, shaped by consolidation, increasing emphasis on investment in growth assets and the urgent need for people to save more.
Its report 2030 Ready: A strategy for the next five years outlines Pension UK’s strategic objectives for 2025 to 2029. The organisation plans to publish a series of reports to understand major themes including adequacy, AI and sustainability, and to respond to the latest projections.
Pensions savings landscape
The scale of under-saving for retirement is highlighted by Scottish Widows’ Retirement Report 2025. It finds that the retirement outlook for UK workers has worsened since 2023, with 15.3 million people – or 39% – risking retirement poverty, up from 35%.
Although pension saving levels have increased in the last 12 months, with projected retirement income rising to £17.2k from £15.5k, they have failed to keep pace with the cost of living. A quarter of people in their 20s prioritise saving for emergency expenses and 13% can’t save at all.
Those in their 30s earning between £20,000 and £35,000 are most likely to contribute the minimum 8% for auto-enrolment. And over 51% of self-employed workers are at risk of not being able to cover their basic needs in retirement, the report finds.
Proposed pensions legislation
Tackling pension poverty is a pledge of Sir Keir’s Starmer’s government, which has continued to push through its 2024 pledges to overhaul UK pensions during its first year. On 5 June it introduced the Pension Schemes Bill, designed to make pensions simpler to understand, easier to manage, increase long-term value, and consolidate pension pots worth £1,000 or less.
Reducing fragmentation across pension posts is among the key proposals made by the Institute for Fiscal Studies’ report, The Pensions Review: final recommendations, along with extended minimum employer contributions to almost all employees from the first pound of their earnings.
The organisation also highlights the main challenges of the current UK pension system, including how rising state pension ages have substantially pushed up the price of income poverty of people in their mid-60s. It also highlights how pension freedoms may have exposed some people to risks they would not have faced if they had a defined benefit (DB) scheme or purchased an annuity.
DB schemes
In its 2025 Endgame Survey, Aon explores over 200 DB schemes in the UK, specifically how they approach long-term funding and the options for DB schemes - or what the industry refers to as endgame strategies. This year, it finds that scheme size is the biggest factor affecting endgames, with a marked shift – from 25% in 2024 to 62% in 2025 – in the proportion of schemes looking to run on, either for the long-term or for a period, with the trend most pronounced for schemes with £1 billion or more of assets.
This comes as the Government Actuary’s Department publishes the Pensions Investment Review: Final Report and consultation responses (on 29 May 2025), and its response to the consultation, ‘Unlocking the UK pensions market for growth’. The reforms aim to deliver major consolidation in the defined contribution (DC) market to enable more investment in productive assets.
It’s a complex and evolving landscape, so the Pensions Policy Institute’s Pensions Primer 2025 is a vital read for anyone looking to stay informed about the UK pensions landscape. The annually updated primer reflects the current position of, and legislated future changes to, the pension system as of 1 June 2025, and offers clear, accessible insights into state and private provisions.
