Are you worried about being worse off in retirement than pensioners today? Have your say
The DWP said on Monday that an analysis showed four in 10, or nearly 15 million people, were under saving for retirement.
In fact, 45% of working age adults are saving nothing at all into a pension, the DWP said, highlighting that lower earners, the self-employed and some ethnic minorities were particularly at risk. Indeed, more than three million self-employed workers are not saving into a pension, while just a quarter of low earners in the private sector are doing so.
The DWP also said that just a quarter of people from a Pakistani or Bangladeshi background are saving into a pension.
In addition, it added that the new analysis revealed a "stark" 48% gender gap in private pensions wealth. It said that a woman currently approaching retirement could typically expect to have private pension income worth over £5,000 less than that of a typical man.
The findings came in an announcement on Monday that government was reviving the Pensions Commission to "examine why tomorrow's pensioners are on track to be poorer than today's and make recommendations for change".
Read more: How to build passive income
The Pensions Commission was a body originally set up in 2002 under the government of then-Labour prime minister Tony Blair. The commission last met in 2006 and its work led to the rollout of auto-enrolment into pension saving, which began in 2012. This policy has meant that 88% of eligible employees are now saving into a pension, up from 55% in 2012.
The DWP said that the relaunched Pensions Commission will "explore the complex barriers stopping people from saving enough for retirement", with its final report due out in 2027.
UK work and pensions secretary Liz Kendall said: "People deserve to know that they will have a decent income in retirement – with all the security, dignity and freedom that brings. But the truth is, that is not the reality facing many people, especially if you're low paid, or self-employed.
"The Pensions Commission laid the groundwork, and now, two decades later, we are reviving it to tackle the barriers that stop too many saving in the first place."
Jordan Clark, financial planner at Quilter, said: "People need to make sure they plan their finances before it is too late and give themselves enough time to rectify potential missed opportunities and mistakes from the past. Clearly there is a desire from people to glide smoothly into retirement, but without a pension pot set up to do this, it simply won't be possible."
"The working-age population needs to be prepared to work later into life, with adequate private pension provision being the only route to avoiding this. There is a real need for bold and innovative solutions to the problems faced, and arguably speed is of the essence."
Are you concerned about being worse off in retirement than pensioners today? Vote in the poll below.
Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers.
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