The UK government has launched a sweeping review of its state pension system amid growing concerns that future generations could face significantly lower retirement incomes. Work and Pensions Secretary Liz Kendall announced on July 21 the revival of the Pensions Commission alongside an early reassessment of the state pension age, citing mounting evidence of a “tsunami” of pensioner poverty if current trends persist.

“We are facing a growing threat of pensioner poverty, and unless we act now, millions could find themselves worse off in retirement than those before them,” Kendall said during the announcement. The move comes despite a pension age review having concluded just last year, signalling the government’s growing urgency in addressing the long-term sustainability of the system.

Current projections suggest that retirees in 2050 could be £800 per year poorer than today’s pensioners in real terms, due to a projected 8% drop in private pension income. Meanwhile, demographic pressures threaten to compound the challenge. The number of people above the pension age is expected to rise by 50% by the 2070s, while the working-age population is set to grow by only 10% over the same period.

“I do not accept that tomorrow’s pensioners should be poorer than today’s,” Kendall remarked, emphasizing the need for long-term planning. “That means we have to do the long-term thinking and build the consensus we need.”

A key focus of the renewed reforms lies in closing the pension savings gap. According to government data, about 15 million working-age adults — roughly 40% — are saving nothing for retirement. Among them, certain groups are disproportionately underprepared: only a quarter of low earners and just one in five self-employed workers contribute to a pension. The data also reveal sharp inequalities when it comes to gender and race. Women approaching retirement currently hold only half the private pension wealth of men, and participation remains lower among some ethnic minority groups.

To tackle these disparities, the government is reinstating the Pensions Commission — an independent body first established in the early 2000s, which was instrumental in introducing automatic enrolment into workplace pensions. That measure, since enacted in 2012, boosted pension savings significantly, with 88% of eligible workers now enrolled, compared to just 55% prior to the reforms. The new commission is being tasked with building a cross-party consensus for the next wave of pension changes, focusing on improving coverage and adequacy, particularly for groups currently left behind.

The Department for Work and Pensions has indicated that the commission’s work will begin immediately, with outcomes expected to shape policymaking for years to come. Kendall stressed the importance of an inclusive national conversation on retirement security, saying the goal is to ensure pensions remain fair and sustainable across generations.

The review also aligns with broader concerns about demographic change in other sectors, including healthcare, where the NHS faces similar pressures from an ageing population. While details of potential policy changes remain under development, officials have pointed to the need for wide-ranging solutions, including potential reforms in pension contributions, greater support for the self-employed, and new savings incentives.

As discussions begin, the government says it will consult widely with experts, employers, trade unions and the public. “This is about choices we make now for the kind of old age we want people to have—not just today, but in 10, 20, 30 years,” Kendall noted. Whether consensus can be reached, and reforms enacted quickly enough to avert what she called a looming crisis, will be central to the coming policy debate.