Why UK Adults Face Pension Poverty and How Retirement Advisors Can Help

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A retirement forecast published in 2026 found that millions of UK adults are at risk of pension poverty due to insufficient retirement savings. Experts are encouraging people to start planning earlier, as even small steps can improve long-term financial security.

While the Pension Schemes Act 2026 introduces important pension reforms, personal retirement planning remains essential. Retirement investment advisors and pension scheme advisors can help individuals make informed decisions and improve retirement outcomes.

What Is Pension Poverty and Who Is Most at Risk?

Pension poverty means not having enough income in retirement to maintain a reasonable standard of living. A pension financial advisor can help savers stay on track with their retirement goals.

The 2026 forecast identified several groups who are particularly exposed:

• People without a workplace pension: who have never been enrolled in an employer scheme
• Self-employed workers: who fall outside automatic enrolment rules that protect employees
• Part-time employees: Working below the automatic enrolment earnings threshold
• Those with long career gaps: Due to caring responsibilities, illness, or periods of self-employment

The Work and Pensions Committee chairwoman Debbie Abrahams welcomed the report but said it revealed serious levels of pension poverty, with many people expected to face a significant gap between retirement income and future living costs.

Why Automatic Enrolment Is Not the Complete Answer

Automatic enrolment has brought millions of workers into pension saving for the first time. However, the 2026 forecast makes clear that it has real limitations:

1. It does not cover the self-employed – Anyone running their own business must make entirely independent pension arrangements
2. It has an earnings threshold – Workers below that level are not automatically enrolled, leaving part-time and lower-income workers exposed
3. Default contribution rates may not be sufficient – Even consistent contributions under automatic enrolment may not build a large enough pot for a comfortable retirement
4. It does not account for employment gaps – Career breaks mean years without contributions, creating significant shortfalls by retirement

Increasing pension contributions can help reduce the risk of pension poverty, but many people still fall outside the automatic enrolment system. For self-employed or part-time workers, guidance from pension financial advisors and retirement investment advisors can help build a more secure retirement plan.

Building a Pension Investment Plan That Actually Works

A pension investment plan is not simply choosing a fund and forgetting about it. It is a structured approach to ensuring your savings grow in a way that matches your retirement goals, your risk appetite, and your timeline.

A well-constructed pension investment plan typically covers:

1. Assessing your current position – What you have saved, where it is, and how it is currently invested
2. Setting a retirement income target – The level of income you need to maintain your standard of living after you stop working
3. Closing the gap – Calculating how much more you need to save and over what period
4. Choosing an investment strategy – Matching your fund choices to your timeline, with growth-focused options for those with many years ahead and more cautious allocations as retirement approaches
5. Reviewing regularly – Life changes, and so do markets; a pension investment plan should be revisited at least once a year

Pension fund investment consultants and financial pension consultants play a key role in steps three, four, and five. They bring the technical knowledge to assess investment options objectively and the experience to know when a strategy needs adjusting.

The Inheritance Tax Change That Affects Everyone’s Pension Planning

Recent pension reforms also highlighted that unused pension pots will soon fall under inheritance tax rules. Experts have warned that this could create additional administrative challenges for families and executors trying to locate old pension schemes and accounts.

This change makes pension planning inseparable from estate planning. Key actions to take now include:

• Keeping expression of wish forms up to date with every pension provider
• Nominating clear beneficiaries so there is no ambiguity about who should receive your savings
• Gathering records of all pension accounts, including old workplace schemes from previous employers
• Speaking with a pension financial advisor or financial pension consultant about how these changes interact with your wider financial plans

How Pension Scheme Advisors Support Employers and Trustees

Pension poverty is not just an individual issue. Under the Pension Schemes Act 2026, workplace pension schemes must now demonstrate stronger performance, transparency, and service quality, with poorly performing schemes facing regulatory scrutiny.

Pension scheme advisors help employers and trustees meet these obligations by:

• Reviewing whether the scheme’s investment strategy is appropriate for its membership
• Supporting trustee boards in meeting their governance duties under the new legislation
• Advising on member communications so employees genuinely understand their benefits
• Identifying where the scheme may be falling short and recommending practical improvements

Many trustee boards now rely on professional pension trustee services to manage growing pension responsibilities. Independent trustee services can also help protect scheme members where conflicts of interest may arise.

You can visit our office to learn more about our pension services and speak with our team directly.

A Guide to the Professionals Who Can Help

Understanding which type of advisor to approach for which situation helps you get the right support efficiently:

Professional	Best For	Core Specialism
Pension Financial Advisor	Individuals and families	Personal retirement planning and pot consolidation
Retirement Investment Advisors	Individuals approaching retirement	Investment strategy and sustainable income planning
Pension Scheme Advisors	Employers and trustee boards	Scheme governance, compliance and communications
Pension Fund Investment Consultants	Trustees and scheme committees	Investment policy, asset allocation and performance
Financial Pension Consultant	Employers and HR teams	Scheme design, contributions and enrolment strategy
Independent Trustee Services	Schemes needing neutral oversight	Conflict-free decision-making and regulatory compliance
Professional Pension Trustee Services UK	All scheme types	Full trustee role and governance framework

 

Seven Steps Every Saver Should Take Right Now

Whether you are twenty years from retirement or five, the national retirement forecast is a prompt to act. Here are the most practical steps you can take immediately:

1. Check what you currently have by contacting all pension providers you have accounts with
2. Locate any deferred pots from previous employers that you may have lost track of over the years
3. Use the pensions dashboard when it launches to get a consolidated view of all your retirement savings in one place
4. Review whether your current contributions are enough to meet your retirement income target
5. Seek pension scheme advice if you are self-employed, have irregular income, or have never reviewed your arrangements with a professional
6. Update your expression of wish forms with every provider in light of the upcoming inheritance tax changes
7. Speak with qualified pension advisors about whether your investment strategy still matches your age, goals, and timeline

Final Thoughts

The national retirement forecast highlights a growing pension poverty risk in the UK, especially for self-employed and part-time workers. While the Pension Schemes Act 2026 introduces key reforms, individuals still need to take responsibility for retirement planning with support from pension professionals.

The forecast is both a warning and an opportunity to act early. It shows the importance of reviewing your pension regularly and ensuring your savings strategy is aligned with long-term retirement needs. Contact us today to speak with our pension advisors.

Approved by 12 plan wealth management Ltd on 08/06/26 – 08/06/27

 

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