More UK employees are saving into a workplace pension than ever before — 23.3 million in 2024, with 89% of eligible workers now enrolled. Yet the proportion of working-age people undersaving for retirement has risen to 43%, up from 38% in previous years. That means 14.6 million people are on track for a retirement income below what they’ll likely need, even after a decade of auto-enrolment.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The nervousness isn’t hard to understand. The pension system is being rebuilt in real time — the Pension Schemes Act 2026, the rollout of pension dashboards by October 2026, new value for money rules, and a push to consolidate small pots into mega-funds of at least £25 billion. All of this lands on savers who are already worried about whether their workplace pension will deliver enough. What I tend to notice is that most people don’t know what their scheme actually charges, how it compares to others, or what their pot might be worth at retirement. That uncertainty feeds the anxiety.
Here’s what you actually need to know.
What I’d say upfront is this: the anxiety around workplace pensions is justified, but it’s also a signal to engage rather than opt out. The worst move is to ignore what you’ve got.
What your workplace pension actually needs to deliver
The full new State Pension pays £230.25 per week in 2025/26 — that’s £11,973 a year. Against the PLSA Retirement Living Standards, that covers 89% of the Minimum level for a single person, leaving an annual shortfall of around £1,427. For a Moderate standard (£31,700 a year for a single person), the gap is over £19,700. Your workplace pension is meant to fill that gap, but the default contribution rates rarely do.
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| Retirement standard (single) | Annual income needed | State Pension covers | Monthly savings needed from age 25 | Monthly savings needed from age 45 |
|---|---|---|---|---|
| Minimum | £13,400 | 89% | ~£15 | ~£60 |
| Moderate | £31,700 | 38% | ~£215 | ~£870 |
| Comfortable | £43,900 | 27% | ~£350 | ~£1,410 |
The auto-enrolment minimum of 8% on qualifying earnings (between £6,240 and £50,270) gets nowhere near the Moderate target for most workers. Starting at 25, you’d need around £215 a month in total contributions to reach a Moderate single income in retirement — that’s more than double the default rate for a median earner. The gap is even starker if you start later. What I’d do in your position is check your total contribution rate (yours plus your employer’s) against these figures. If you’re only at the minimum, the numbers speak for themselves.
Where people get workplace pensions wrong
Opting out of auto-enrolment
Around 11% of eligible employees still opt out. The immediate gain is a few extra pounds in your pay packet. The long-term cost is far larger. A 25-year-old who opts out for just five years loses not only their own contributions but also their employer’s match and years of compound growth. On median earnings, that could mean £50,000+ less in their pension pot at retirement. The government’s own roadmap notes that auto-enrolment flipped the UK’s position in OECD pension participation rankings — opting out reverses that progress for you personally.
Ignoring scheme performance and charges
Most people never check how their workplace pension is performing or what they’re paying in charges. The difference between a scheme charging 0.5% and one charging 1.0% might sound small, but over 40 years it can reduce your final pot by 15-20%. With the new Value for Money framework arriving in 2028, schemes will be rated red, amber, light green, or dark green. If yours lands on red or amber, it must be closed to new business. Don’t wait for that — check your annual statement and ask your provider what your scheme’s charges and performance look like compared to the market.
Leaving small pots scattered across multiple jobs
Each job change often creates a new pension pot. The UK now has an estimated 3.3 million lost pots containing £31.1 billion. Small pots are at risk of being lost entirely, and they incur ongoing charges that eat away at the balance. The government estimates that the creation of individual pots per job change drives around £240 million a year in waste. The Pension Schemes Act 2026 includes provisions for automatic consolidation of pots under £1,000, but for larger pots you’ll need to act yourself. Use the pension tracing service to find old pots, then consider consolidating them into your current workplace scheme or a personal pension — but check for exit fees or lost benefits first.
Assuming the State Pension will fill the gap
The full new State Pension of £11,973 a year is a solid foundation, but it’s not enough for most people’s retirement aspirations. The PLSA Minimum standard for a single person is £13,400 — already above the State Pension. For a Moderate standard you need £31,700. And the State Pension age is rising — to 67 between 2026 and 2028, with a further rise to 68 legislated for 2044-2046. If you’re in your 40s or younger, you may not see your State Pension until 68 or later. Relying on it alone is a risky strategy.
How to take control of your workplace pension
Know what you’ve got and what it’s doing
Start with your annual statement. It tells you your current pot value, your contribution rate, your employer’s contribution, and the fund your money is invested in. If you don’t know which fund you’re in, you’re probably in the default one — and default funds vary widely in performance and risk. The regulatory risk and pace of change in pensions means your default fund may be reviewed and changed by your provider, but you should still understand what you’re holding. Check the charges (the Ongoing Charges Figure or OCF) and compare it to the market average of around 0.5-0.75% for workplace schemes.
Use the tools coming your way
Pension dashboards are expected to go live to the public from late 2026, with the MoneyHelper dashboard likely first. This will let you see all your pension savings — workplace, personal, and State Pension — in one place online. That’s a game-changer for understanding your total position. The updated government pensions roadmap confirms that all schemes must be connected to the dashboard ecosystem by the October 2026 deadline. When it launches, use it immediately to get a full picture of your retirement savings.
Plan for decumulation, not just accumulation
The Pension Schemes Act 2026 requires workplace pension providers to offer default retirement income solutions — known as Guided Retirement — for members who don’t make an active choice. These will include options like ‘flex and fix’ and Retirement Collective Defined Contribution (R-CDC) schemes, which aim to provide a sustainable income throughout retirement. Master Trusts must be compliant by July 2029, with single employer trusts following by July 2030. This is a significant shift: instead of being left to figure out drawdown or annuity purchases on your own, you’ll have a default path. But you can still choose your own route if you prefer.
What the consolidation wave means for you
By 2030, all multi-employer DC schemes used for auto-enrolment must have at least £25 billion in assets in their main default arrangement. That means many smaller schemes will merge or close, and your pot may be moved to a larger scheme. This should mean lower charges and better governance — larger schemes are much more likely to have in-house investment expertise and access to a wider range of assets, including private markets. The government’s roadmap notes that 50% of Master Trusts are already planning to increase their allocation to alternative assets, compared to only about 10% of small schemes. If your pot is moved, check what the new scheme offers in terms of charges, investment options, and retirement income choices.
What happens if my workplace pension provider changes or merges? ▾
Can I lose money in a defined contribution workplace pension? ▾
How do I find a lost workplace pension pot? ▾
Should I increase my workplace pension contributions above the minimum? ▾
What is the Money Purchase Annual Allowance and does it affect me? ▾
Will the State Pension age change again before I reach it? ▾
The real risk is doing nothing
The nervousness around workplace pensions is understandable — the system is complex, the rules keep changing, and the numbers can feel daunting. But the research is clear: the people who end up with adequate retirement incomes are the ones who engage early, check their scheme’s performance, and increase their contributions where they can. The Pensions Commission’s interim report confirms that around 15 million people are currently undersaving, and without changes that number could rise to 19 million. The reforms coming between now and 2030 — dashboards, value for money ratings, guided retirement, and consolidation — are designed to help, but they only work if you pay attention.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read DIY Retirement: Taking Control of Your Finances and Future.
Sources and Further Reading
Retirement Regret: How to Avoid the Biggest Financial Pitfalls — Practical steps to avoid common retirement planning mistakes that cost savers the most.
How UK Families Are Splitting Bills Without the Arguments — A look at how households manage shared finances and plan for retirement together.
The Investors Centre (2026). UK Pension Statistics 2026. 🔗
Dentons (2026). Inside the Pension Schemes Act 2026. 🔗
Department for Work & Pensions (2025). Workplace Pensions: A Roadmap. 🔗
Department for Work & Pensions (2026). Workplace Pensions: An Updated Roadmap. 🔗
