The UK Government has relaunched the Pensions Commission – nearly 20 years after it first transformed the retirement landscape – in a bid to address growing fears that future retirees could be worse off than today’s.
While Automatic Enrolment has helped millions of employees start saving, the system still leaves behind huge swathes of the working population, and the self-employed remain the most exposed.
New government figures released on 21st July 2025 show:
- Almost half of working-age adults are saving nothing at all into a pension
- More than 3 million self-employed people are not contributing to any retirement fund
- People retiring in 2050 are expected to have 8% less private pension income than today’s retirees, unless urgent action is taken
Why the self-employed are most at risk
Unlike employees, sole traders and freelancers aren’t automatically enrolled in a pension scheme. There’s no employer to set one up, no monthly contributions deducted from a payslip, and no top-up from a company pension fund. If you don’t act yourself, nothing happens – and for millions of self-employed people, that’s exactly what’s happened.
Cost, uncertainty, and irregular income are often cited as reasons for not saving. But the long-term consequences are stark: without personal pension planning, many sole traders risk having little more than the State Pension to live on when they retire.
Our guide to starting a pension when you’re self-employed explains how to get going, even if you’re late to the game. And if you’re unsure how much to save, this article breaks down how sole trader pensions work and the tax benefits available.
The revived Pensions Commission – what it means
The new Commission has been tasked with looking at the long-term sustainability of the UK’s pensions system. It will examine what’s holding people back from saving enough, particularly groups like the self-employed, low earners, women, and ethnic minorities, who are often underrepresented in pension statistics.
With a final report due in 2027, the Commission will aim to build a national consensus on how to ensure more people can look forward to a decent income in retirement, including those outside traditional employment.
Recent figures highlight just how unequal things are: only 1 in 4 low-paid private sector workers are saving into a pension, and self-employed workers are still excluded from the auto-enrolment model that transformed workplace savings for employees.
Real reform, or more delays?
It’s not the first time policymakers have raised the alarm. As we reported previously in our look at self-employed pension struggles, experts have warned for years that the current model doesn’t meet the needs of flexible workers and freelancers. While reviews and consultations have come and gone, structural change has been slow.
This time, the hope is that a high-profile, cross-sector Commission can do what previous attempts haven’t: deliver a roadmap for meaningful reform that includes the self-employed, rather than leaving them as an afterthought.
Whether that means auto-enrolment for the self-employed, smarter default pension products, or tax-based incentives remains to be seen. But the message is clear – doing nothing is no longer an option.
What you can do now
While the Commission explores long-term reform, self-employed people don’t need to wait.
The most effective step you can take now is to start building your own pension pot – even modest, regular payments can grow significantly over time.
Thanks to tax relief, the government adds to what you save, making pensions one of the most efficient ways to put money aside for later life.
As Work and Pensions Secretary Liz Kendall put it today: “People deserve to know that they will have a decent income in retirement.”
But the reality is, if you’re self-employed and don’t have a private pension, your retirement income may be limited to the State Pension, which currently pays just £230.25 per week.
To help you get started, see: