The Department for Work and Pensions (DWP) has issued a stark warning to millions of self-employed individuals who are not saving enough for retirement. Pensions Minister Torsten Bell described the situation as a "catastrophe," revealing that only four per cent of those relying solely on self-employment income are currently contributing to a pension.
Addressing delegates at The Investing and Saving Alliance Annual Retirement Conference 2026, Bell, a Labour Party government minister, highlighted the alarming statistics. According to the Office for National Statistics (ONS), there are approximately 4.57 million self-employed workers in the UK. Bell stated: "If I just look at the ones we're most worried about, who just have self-employment income... four per cent are now saving into a pension. It's a catastrophe."
Broader Pension Crisis
Bell further noted that across the entire working-age adult population, only 55 per cent are saving into a pension. "Our job is to make sure that we've put in place a pension system that builds on the success of automatic enrolment," he said. He criticised the current system, which he described as lacking engagement until retirement age, when individuals suddenly need to become financial experts.
The government is addressing these concerns through the Pensions Commission, which Bell confirmed will deliver its final recommendations in early 2027. Established in July 2025, the Commission aims to tackle the savings challenge that has been building for decades. It examines why tomorrow's retirees risk being worse off than today's and proposes solutions to reverse this trend.
Commission's Perspective
Pensions Commissioner Baroness Jeannie Drake commented: "Over the past two decades since the Turner Commission, there is no doubt pensions reform can be described as a success. Yet the second Pensions Commission is looking forward and seeing many people not saving enough and millions not saving at all. This demands a renewed national settlement on pensions. Achieving this will require clarity of purpose, but it also offers a moment of opportunity; to renew a social contract that commands confidence across the country."
The recommendations in the final report will address the need to secure adequate income in later life and create a pension system fit for decades to come.
