Revived Pensions Commission Aims to Secure Better Retirements

The government has announced the revival of the Pensions Commission, in an attempt to stop future pensioners from being worse off than those retiring today.

New government analysis suggests some worrying trends:

• 45% of working-age adults are not saving into a pension.
• 4 in 10 people aren’t saving enough for retirement.
• Self-employed workers, low earners and some ethnic minorities are most at risk of falling behind.
• There’s a 48% gap in private pension wealth between men and women.

It’s estimated that people retiring in 2050 could see 8% less private pension income than today’s pensioners.

What will the Commission’s role be?

The newly revived Commission will look at what may be stopping people from saving enough and will issue its final report in 2027.

What does this mean to a business owner?

If you’re self-employed or run a small business, now is the time to review your retirement planning. Recent figures suggest that 3 million self-employed people are not saving into a pension.

However, these figures don’t take into account that many business owners plan to use their business as their pension. For instance, you may be planning to sell the business or property within it to fund retirement.

Whatever your current plan, it’s important to review your planning regularly to ensure that you will have a large enough pension pot when you come to retire. Contributing to pensions can also attract tax advantages which should be factored in.

It’s possible that the Pensions Commission could widen Auto-enrolment, and force self employed or small business owners to contribute to a scheme, but at this stage their plans are unclear. We will of course keep you up to date with any future announcements.