CONSULTATION RESPONSE - Pensions 2050: Evidence and Future Priorities

Consultation Response – Pensions 2050: Evidence and Future Priorities

The Older People’s Commissioner for Wales

Established by the Commissioner for Older People (Wales) Act 2006, which sets out details of the Commissioner’s role and statutory powers, the Older People’s Commissioner for Wales is an independent voice and champion for older people throughout Wales. The role of the Commissioner is to promote awareness of the rights and interests of older people in Wales, challenge discrimination, encourage best practice and review the law affecting the interests of older people in Wales.

Introduction

The Commissioner welcomes the opportunity to respond to the Second Pensions Commission’s interim report, Pensions 2050: Evidence and Future Priorities.

The Commissioner has recently submitted evidence to the Third State Pension Age Review^[i] and the Work and Pensions Committee inquiry into Pensioner Poverty^[ii]. Those submissions remain relevant and should be considered alongside this response.

This response focuses on the issues of greatest significance to older people in Wales and the actions needed to ensure that future pension policy supports dignity, independence and financial security in later life.

The Commissioner believes that:

The State Pension should remain the foundation of retirement income
Pension adequacy should be prioritised alongside sustainability
Healthy life expectancy should be central to decisions about State Pension age
Pension policy should not deepen existing inequalities
Retirement income policy should take account of housing costs and wider living costs
Future reforms should reflect the experiences of people in Wales

Pension adequacy and the State Pension

Many people have limited opportunities to build private pension savings due to low pay, insecure employment, caring responsibilities, disability or ill-health. Women, carers, the self-employed, and many Black, Asian and Minority Ethnic groups continue to face structural barriers that the system has not yet overcome. For these groups, the State Pension remains essential in protecting against poverty.

The shift from defined benefit pensions to defined contribution pensions has placed greater responsibility and risk on individuals. Many people are now expected to navigate complex decisions about pension investment, retirement timing and how best to draw on their savings throughout later life.

This uncertainty can be challenging, particularly for those with lower levels of financial confidence, limited access to advice, or additional vulnerabilities linked to poor health, disability or digital exclusion.

Decisions made at retirement can have significant and lasting consequences for income and living standards in later life. Future reforms should recognise these challenges and ensure that people have access to clear, accessible and independent support when planning for and managing retirement.

The Commission should therefore:

Recommend the establishment of a minimum retirement income based on what is required for a dignified later life, and assess whether the State Pension and wider retirement income system collectively enable people to achieve it
Consider the impact of inequality across the life course on retirement outcomes
Ensure that future reforms do not increase poverty among older people

The Commissioner would caution against any approach that assumes private pension saving alone can compensate for inequalities experienced throughout working life.

Healthy life expectancy and State Pension age

The Commissioner continues to believe that healthy life expectancy should carry greater weight than life expectancy alone when considering future changes to State Pension age.

Living longer does not necessarily mean that people can work for longer. This is particularly important in Wales, where healthy life expectancy remains significantly lower in some communities – healthy life expectancy is around 61 for men and 60 for women^[iii].

Future decisions about State Pension age should therefore:

Take account of healthy life expectancy
Consider the impact on people in physically demanding occupations
Recognise the experiences of disabled people, unpaid carers and those living with long-term health conditions
Include robust equality and socio-economic impact assessments

Reducing pension inequalities

The interim report rightly highlights the risks faced by women, carers, low-paid workers and others who may have interrupted employment histories.

Many older people in Wales have experienced disadvantage throughout their working lives that affects their income in retirement.

Employment rates for people aged 50–64 are lower in Wales than in other parts of the UK, with 66.4% of this age group in employment in Wales (July – September 2025^[iv]).

The Commissioner’s previous response highlighted that some people who would previously have reached State Pension age may instead move onto working-age benefits, and that there has been a rise in incapacity benefit caseloads among people over 65.

Future reforms should therefore:

Strengthen support for unpaid carers
Address the gender pension gap
Protect disabled people and low-paid workers
Ensure automatic enrolment reforms do not create hardship for people on lower incomes

Housing costs and financial security

The Commissioner welcomes the interim report’s recognition that future pensioners are more likely to face housing costs in later life, with declining home ownership creating new pressures in retirement.

Pension adequacy cannot be judged solely by pension income. A pension that may appear adequate for someone who owns their home outright may be wholly insufficient for someone paying private rent, living in insecure housing, or facing high housing-related costs.

Pension adequacy cannot be considered in isolation from wider living costs, including housing, fuel and disability-related expenses. This is particularly important in rural communities, where older people may face higher transport, heating and service access costs.

The Commission should ensure that housing circumstances form part of any assessment of future retirement income adequacy.

Accessibility and Inclusion

The pensions system should be easy to understand and easy to access.

Older people who are digitally excluded, have limited access to advice, or face barriers linked to health, disability or language, should not be disadvantaged or face digital ageism.

Future reforms should include:

clear, accessible and bilingual information
non-digital routes to support and advice
stronger protection from scams
targeted support for people approaching retirement

Pension policy must not assume that everyone can, or wishes to, engage online. This is particularly important in Wales, where digital exclusion remains a significant issue for many older people. Pension reform should not assume that digital access, digital confidence or financial literacy are universal.

Ensuring Wales is reflected in future policy

Although pensions are reserved to the UK Government, their impact is experienced differently across the UK.

Future recommendations should therefore reflect the lower healthy life expectancy in parts of Wales, the labour market differences, rurality, poverty and health inequalities.

The Commission should engage directly with older people and stakeholders in Wales, publish Wales-specific analysis, and ensure that its recommendations do not inadvertently disadvantage people in Wales.

Pension Credit

Pension Credit remains significantly underclaimed, meaning that many older people are missing out on financial support that they are entitled to. Future pension reforms should include measures to maximise take-up through proactive promotion, data-sharing and targeted support for those most at risk of poverty.

The Commissioner also believes that entitlement systems should be simplified, making it easier for older people to understand what support is available, access their entitlements and navigate the pensions and social security system with confidence.

Key recommendations summary

The Commission should:

Recommend a clear benchmark for an adequate retirement income
Maintain the State Pension as the foundation of retirement income
Give healthy life expectancy equal weight to life expectancy in State Pension age decisions
Assess the impact of reforms on carers, women, disabled people, low-income workers and Black, Asian and Minority Ethnic groups
Incorporate housing costs into retirement income adequacy assessments
Ensure reforms are accessible to digitally excluded people
Publish Wales-specific analysis and recommendations

Conclusion

The Commissioner welcomes the Pensions Commission’s interim report and supports the development of a pensions system that is adequate, fair and sustainable. The report provides a valuable assessment of the challenges facing future pensioners and recognises the important role of the State Pension and wider social security support in preventing poverty and promoting financial security in later life.

Future reforms should prioritise pension adequacy alongside sustainability, address inequalities experienced throughout the life course, and give greater weight to healthy life expectancy when considering changes to State Pension age. Decisions about retirement income must reflect the realities faced by those on low incomes, women, unpaid carers, disabled people and others who have limited opportunities to build pension savings.

A fair pensions settlement for 2050 must enable everyone to enjoy a dignified, independent and financially secure later life. The Commissioner encourages the Commission to establish a clear understanding of what constitutes an adequate retirement income and to ensure its final recommendations support this goal.