Department for Work and Pensions
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11 million under-saving Brits

Almost 11 million Brits are facing inadequate retirement incomes according to new figures from the Department for Work and Pensions.

These 'under-savers' are expected to have pension incomes below the target levels suggested by the Pensions Commission in 2004.

Minister for Pensions, Steve Webb said:

"This is a very large group of people who will face a big drop in their living standards on retirement if they do not take action now.

"And this is not just a problem for those on lower wages - those on high incomes are just as much at risk of having a lower standard of living in retirement if they do not take this seriously.

"We have to make it easy for people to save, in confidence, knowing that they are putting enough away to have a comfortable retirement.

"Our reforms to the state pension and the start of automatic enrolment into workplace pensions will help people do this.

"A simple flat-rate state pension above the basic level of the means test will bring much needed clarity and simplicity to the pension system.

"It will provide the foundation needed to support automatic enrolment into workplace pensions, helping to ensure people can save for their retirement with confidence."


The analysis is available here:

  • Estimated numbers of individuals aged 22 to State Pension Age in 2012 with inadequate retirement income under Pensions Commission replacement rate targets.
Target replacement rate80%70%67%60%50%All
Income bracket Under £12,000 £12,000-£22,100 £22,100- £31,600 £31,600- £50,500 Over £50,500 All
Total individuals (millions) 1.3 4.3 4.4 8.9 9.0 27.8
Number with income below target (millions) 0.1 1.2 1.7 3.4 4.2 10.7
Percentage with income below target 11% 29% 39% 39% 47% 38%

Sources: Pensim2 model, V14_00 without automatic enrolment, and first wave of Wealth and Assets Survey

Notes to editors:

  • Estimates are in millions, rounded to nearest 0.1 million
  • Income brackets are in constant terms relative to average earnings in 2012/13. Couples are placed in the income bracket reflecting their combined income.
  • Estimates are for Great Britain
  • Estimates exclude around 1.6m people whose working age income is below the level of the Guarantee Credit
  • Further detail on both the single tier reform and State Pension age review mechanism in a white paper in the Autumn.

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