The populist case for fixing the pension system

Spectator

14-07-2025

Pensions rarely top the Westminster agenda or get politicians excited. Too boring, too distant. But maybe, just maybe, pensions will soon become political.
There is a growing consensus among pensions policymakers and industry insiders: if we want future generations to retire with a bit of security and comfort, contributions into defined contribution (DC) pensions must rise. That means workers will need to put in more – and so will their employers.
So soon the government will take the next sensible steps on this sensible journey, with its ongoing Pensions Review starting to focus on 'adequacy', technocrat-speak for saving enough to retire on.
The world of pensions policy is a small, pleasant one. Experts, executive and officials tend to meet and talk amicably, away from the passion and poison of politics, about doing sensible, technical things in the best interests of the public. I'm lucky enough to visit pensions world sometimes and it's a treat for a centrist technocrat like me – smart, decent people trying to do smart, decent things.
But there is a huge risk in clever people making clever policy away from the public.
So in parts of pensions world, away from the consensual panel sessions and policy papers, there's political fear, which shapes the thinking of ministers and mandarins alike. What if Nigel Farage decides to attack all this?
Farage is a force in the land. Anyone who's watched him work an audience or studio knows how easily he could turn 'increased pension contributions' into a populist talking point about taxing working people to prop up a system run by out-of-touch elites.
I understand that fear. I've spent enough time in and around pensions policy to know that these are not the sexiest or easiest issues to sell to voters. And the fear that rising contributions could be turned into a political attack line has already delayed reform. The government had planned to announce a new Pensions Commission to look at contributions last autumn, but delayed the move in the wake of the autumn budget.
When that commission does finally launch, fear of attack by Farage (or a Convervative party aping his approach) will loom, large but unspoken, in the background.
I think the fear is misplaced. In fact, it's back to front. The right response to Farage on pensions isn't to hide from him – it's to try and enlist him and his politics.
Because there is a genuinely populist case for pensions – and for better pensions policy. Not in spite of Nigel Farage, but very much in line with his values, his instincts, and those of his supporters. He's popular for a reason, after all. If pension policymakers want their reform agenda to survive contact with the public, they should start thinking – and talking – more like Farage.
Start with the most obvious theme: control. What was Brexit if not a demand for ordinary people to take more control over their lives – to repatriate decisions from remote, unaccountable authorities? Pensions are part of the same story. When you don't save enough, when your pension pot is too small, you lose agency. You end up relying on the state – or your children, or the housing market, or the shifting preferences of future chancellors. That's not security. It's thraldom.
If you really want to Take Back Control, put more in your pension.
A decent pension is the very essence of self-reliance and pride. It says: I worked, I saved, I did the right thing – and now I can stand on my own two feet. If the populist right believes in anything, it's that.
Then take the role of employers. This is where some policymakers get really twitchy. They worry that asking businesses to pay more into pensions will be seen as anti-growth, anti-business – and therefore toxic to a pro-enterprise agenda. But again, that's the wrong political lens. The right one is this: what happened to the deal?
Here, the pension-populist argument goes like this. There was a time when British businesses saw pensions as part of their basic duty to employees. You worked hard, stayed loyal, and got something back at the end. That social contract has been quietly shredded. Today's multinationals boast about their values and their people while cutting pension contributions to the legal minimum.
Populist pension politics would demand better. It would ask: If you want to do business here, what are you doing for your workers? It would make a moral and national case for stronger employer pension contributions, not as a handout but as a marker of decency. It would say: pensions are part of the price of a functioning society – not an optional extra. For those employers – and there are a lot of them – who do go the extra mile to support workers' pensions, there should visibility and recognition. (I recently wrote an SMF paper on this, if you're really keen.)
Pension officials worrying about Farage and the Daily Mail should see that their case can be made in right-wing language. This isn't redistribution. It's contribution. It's firms putting something back into a system that allows them to operate and profit. It's responsibility, not regulation.
Which brings us to the real problem: language. How do we talk about pensions in a way that ordinary people understand and connect with? Too often, we don't. Policymakers and pension lobbyists should not shrink from populism — we should channel it. Farage or one of his tribute acts will fill the silence if others stay quiet. That would be a disaster: a populist vacuum filled with simplistic outrage. Instead, pension reformers should speak the language of pride, family, and common decency.
Stop talking about 'replacement rates' and 'opt-out inertia'. Start talking about security, personal stake, a fair deal. Remind people that pensions are not optional luxury – they are rights earned through decades of work. And remind firms: this is not a cost – it is an investment in your people and a proof-point of your commitment to them.
How do we talk about pensions in a way that ordinary people understand and connect with?
The policy details are not trivial. Auto-enrolment defaults, smart decumulation pathways and the rest all have a role. But none of that will matter unless the political story is won first.
Right now, the pensions policy establishment is nervous. Nervous that Farage or someone like him will come along and blow the whole thing up with a single line about new burdens and working families. But avoiding the issue won't work. Nature abhors a vacuum, and so does politics.
The better strategy – the smarter politics – is to tell a better story first. Don't fear Farage. Speak to the same instincts that make him successful. And perhaps even challenge him to back a policy agenda that's actually on the side of the very people he claims to speak for.
There is a compelling, patriotic, populist case for fixing our pension system – for higher contributions, fairer treatment of workers, and a culture that values self-reliance. The question is whether policymakers are ready to make it.
Like it or not, populist arguments have power. Use that power to build up the pension system, before someone uses it to break things.