Fifteen million Brits are not saving enough into their pension. Are you?

For millions of people across the UK, preparing for retirement feels like a tomorrow task. Yet, new data from the Government shows how important it is to take a proactive approach to your pension.

According to a report published by the

Rising living costs and competing financial priorities mean many households are struggling to balance their immediate needs with long-term wealth accumulation. However, understanding whether your pension contributions are enough to lead a comfortable life in retirement is one of the most important financial checks you can undertake.

Keep reading to learn whether your pension savings are sufficient and what steps to take if they fall short.

Auto-enrolment has transformed workplace saving, but it may not be enough

The introduction of auto-enrolment in 2012 fundamentally changed the shape of the UK retirement landscape by automatically enrolling millions of employees into pension schemes.

As of 2026/27, the mandatory minimum contribution is set at 8% of qualifying earnings. In most cases, this is made up of a 5% employee contribution alongside a 3% contribution from the employer. Individual companies may offer enhanced contributions as a benefit.

Whilst auto-enrolment has meant that more people are saving for retirement, many savers wrongly assume that paying the minimum rate guarantees an adequate retirement income.

Indeed, data reported in FTAdviser notes that only 9% of the UK’s working population is on track to achieving a comfortable retirement.

The pension savings gap disproportionately affects certain groups

The savings gap is especially acute among specific groups, particularly women and those who are self-employed.

The Pensions Commission report highlights that only 4% of wholly self-employed workers are actively contributing to a pension.

Moreover, due to career breaks, part-time work, and structural pay differences, women approaching retirement have lower average private pension wealth than men. The difference here is stark, with the Department for Work and Pensions noting that women retire with approximately £81,000 compared to £156,000 for men.

Compounding this shortfall is the way individuals choose to access their capital. Data reported by The Guardian found that approximately 30% of private pension pots are drawn down at the earliest possible age, with close to half of those pots withdrawn in full.

Of these early withdrawals, almost half are spent on purchases such as cars, holidays, and home renovations. This could leave many in a precarious financial situation.

Read more: 77% of people won’t even have a moderate pension income

Calculating if you’re saving enough could help you mitigate any shortfalls

It’s important to determine whether your current savings line up with your expectations, as approaching retirement with a vague sense of your financial position could be a risky move.

Here are three ways to work out your baseline:

1. Establish your target retirement income. The Pensions and Lifetime Savings Association provides national benchmarks to get you started. It recommends that a single individual would need approximately £45,400 each year for a comfortable retirement, whilst a couple would require £62,700.
2. Account for every potential income stream. It’s vital to have an overview of the various sources of income you will have access to in retirement. This could include the State Pension, private and workplace pensions, investment returns, or even rental yields.
3. Have a general sense of your life expectancy. As access to medical care improves and people live longer, retirement could easily span 20 to 30 years or more. Ensuring your capital lasts throughout your lifetime requires careful management.

Reviewing these elements together gives you a practical and realistic foundation from which you can evaluate your long-term readiness.

Taking practical steps today could help you close a retirement savings shortfall

If your calculations reveal a shortfall, there are several actions you can take to get back on track.

• Maximise employer contributions: If your employer offers matching contributions above the statutory minimum, taking full advantage is one of the quickest ways to boost your pension savings.
• Capitalise on pension tax relief: Tax relief is a powerful way of boosting your pension savings, as basic-rate taxpayers receive an immediate 20% tax relief top-up from HMRC. Higher-rate and additional-rate taxpayers can claim back an effective 40% or 45% on some or all of their contributions through self-assessment (or tax code adjustment for higher rate).
• Use your Annual Allowance: For mid-to-high earners looking to make up lost ground, you can contribute up to £60,000 (or 100% of your earnings, whichever is lower) and still benefit from tax relief. Moreover, you can take advantage of unused Annual Allowance from the previous three tax years if you need to inject a significant lump sum into your pot. Keep in mind that the Annual Allowance includes employer contributions.
• Integrate a cashflow model into your financial plan: Though you may have a sense of what your pension pot is worth today, it’s important to be aware of how your money will perform over the next few decades. A cashflow model can help you visualise and stress-test your wealth.

Implementing these measures could make a substantial difference to your final pot over time, and it’s something we can help with.

Take control of your financial future

Building a secure retirement is something that requires active management, regular reviews, and a clear understanding of how your contributions today could impact your financial future.

Whether you’re looking to close a savings gap, optimise your tax, or work out your projected income, we’re here to help.

Together we can review your pension plan and find ways to ensure you’re on course for a comfortable retirement.

Email us at enquiries@pen-life.co.uk or call 01904 661140 to find out more.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate cashflow planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pensions Regulator.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.