Pensions minister Torsten Bell delivered the alert this week as a new report warned people are ‘falling out’ of the system
A senior DWP minister has issued a ‘blunt truth’ warning to millions of people across the UK. Pensions minister Torsten Bell set out his alert this week as a new report highlighted concerns over the significant number of Brits ‘falling outside’ the system.
Mr Bell, the MP for Swansea West and a prominent figure in the Labour Party, spelt out what large numbers of people must do for their financial futures – warning this “is simply not what progress is supposed to look like.” The minister – who has had senior roles working for Ed Miliband and Alistair Darling – also highlighted that people now in their 40s retiring in 2050 would face a bleaker retirement than people today unless there was a big change.
His warning was about private pensions and specifically their uptake among the self-employed. This makes up a large chunk of the UK workforce – exceeding 4 million people, according to IPSE, the self-employment association.
Mr Bell delivered a clear warning to the overwhelming majority of such workers in his latest newsletter. In it, he said: “The blunt truth is that collectively we are not saving enough to ensure that today’s workers, tomorrow’s pensioners, have a comfortable retirement.”
The pensions minister added: “Currently we’re on track for those retiring in 2050 to have private pension incomes that are 8% lower than people retiring today. In an ageing society – the number of people aged over 75 is set to double between now and 2075 – that is simply not what progress is supposed to look like.”
His remarks arrive as the Pensions Commission examines recommending reforms to the UK’s pension system. Mr Bell pledged in his latest message that Andy Burnham’s government would not ignore the commission’s recommendations, stating: “We’ll act on their findings.”
On Wednesday, the Society of Pension Professionals (SPP) issued a warning that millions of self-employed individuals are being left without access to pension provision. A new paper published by the SPP, entitled The Missing Millions: Rethinking Pension Policy for the Self-Employed, urges a fundamental reassessment of how the UK supports those who work for themselves in building financial security for retirement.
The SPP warns: “There is no equivalent workplace default, no employer contribution and no payroll mechanism to make saving effortless. Fixed monthly contributions can also sit uneasily alongside the ‘lumpy’ income patterns of freelancers, sole traders, contractors and business owners.
“And the challenge extends beyond sole traders. Around three-quarters of UK private sector businesses have no employees other than their owners, creating a huge cohort of micro-business owners who can fall outside the practical benefits of the workplace pension system.”
It has put forward several recommendations, including using the tax system to establish a default route into pension saving, and developing or expanding default pension arrangements for the self-employed.
Problems with the current pensions system in the UK
The Pensions Commission released its interim report in May on the state of retirement saving across the UK, outlining the key challenges today and what needs to be fixed. The report stressed that many people are not saving adequately for retirement.
It warned this was particularly the case among low and middle earners, the self-employed and women. It said the system needed to change to meet modern working lives.
There are currently 15 million people under-saving for retirement which could reach 19 million without action, leaving large groups across the UK facing a severe cliff-edge when they retire, according to the Pensions Commission’s interim findings. Set up by the Government in July 2025, the Commission aims to address a savings challenge that has been building for decades, examining why tomorrow’s retirees’ risk being worse off than today’s and making recommendations to reverse this.
Helen Morrissey of investment platform Hargreaves Lansdown said recently: “The self-employed are not covered by auto-enrolment, so all the work of finding a pension provider and investing is down to them. And the result is that the majority just don’t.
“The problem is likely that saving into a pension means the money is locked away until they’re at least 55 (and this is rising to 57 in 2028). For someone with a fluctuating income, like the self-employed, this can cause issues and mean looking for alternative ways of saving.”
Mr Bell’s interest in pensions is long standing. The minister, who previously led the well-regarded Resolution Foundation think tank, co-authored a report in 2023 that called for a massive increase in how much people should pay in. It said: “The success of pension auto-enrolment should be built on, with a 50 per cent increase in minimum contribution rates.”
In his latest newsletter, he explained why getting a pension made complete sense. He said: “For every £1 the worker saves they get £4 back in retirement (that’s around £8 before we take inflation into account). Why? You save £1, the taxman puts in 25p in tax relief and the employer contributes at least 75p. And then the important part kicks in: your pension pot doesn’t just sit there, it is invested, grows, and grows further as investment returns on those previous returns build up over the years. Compound interest is a wonderful thing.”
For more of Mr Bell’s Substack articles, go here.
