This article is intended for professional and institutional audiences only and is not directed at retail clients.
By David Brooks, Head of Policy at Broadstone
A change in Prime Minister always creates the sense of a reset. The reality is more constrained. Public finances are tight, demands are rising, and pensions – like everything else – must be funded from the same finite pool.
There is no cost-free reform. More from employers, the state or individuals all carries consequences. Those trade-offs remain but moments like this still create space to reset the debate.
A system built in stages – and still unfinished
Today’s system is the product of successive reforms:
- The shift from defined benefit to defined contribution has transferred risk from employers to individuals.
- Automatic enrolment bringing millions into saving, increasing participation, but raising the question of whether savings will be sufficient for retirement.
More recent reforms, including those within the Pensions Schemes Act 2026, point to a system now evolving: stronger defaults, better guidance, more structured support at retirement.
Adequacy: moving beyond the familiar script
Adequacy is often framed too narrowly to be useful.
For most people, the issue is not awareness or intent. It is the practical constraint of saving more alongside housing costs, caring responsibilities and uncertain earnings. The barrier is capacity.
That shifts the question. Adequacy is not simply about contribution rates, it is about whether outcomes are predictable, stable and fair. That depends as much on how risk is shared and managed as on how much is saved.
The limits of incremental reform
The work now underway through the Pensions Commission, under Jeannie Drake and others, is important, but necessarily bounded.
Its most important contribution may be to show the limits of what can be achieved within the current framework and to surface issues that require political judgement, not technical adjustment.
What is needed next is not another set of refinements, but a longer-term settlement.
The questions are not new, but they remain unresolved:
- how risk should be shared between individuals, employers and the state
- whether collective approaches should play a more central role
- how the boundary between state provision and private saving works in practice
These are questions of distribution and fairness. Not just modelling.
Read more: Do politicians keep changing UK pensions? The reality for ordinary savers and trustees in 2026
A finite system, competing priorities and risk
Pensions sit alongside health, social care and support for working-age households. These all draw on the same resources and shape the same outcomes.
Pushing for more, particularly for those already relatively secure, risks losing credibility in that context. The focus should be on using what we have more effectively and more fairly.
At the same time, the system continues to rely heavily on individuals to absorb risk. Without stronger mechanisms, whether through employers, collective structures, or system design, outcomes will remain uneven and, for some, inadequate.
Read more: How inclusive design can improve workplace pension engagement
A clearer direction of travel
If the system is struggling to deliver outcomes consistently, the answer is not just incremental change. It is being clearer about what we are trying to build. But it does require a set of guiding principles.
A starting point might be:
Judge the system by outcomes
Success is whether people experience security and predictability in retirement, not just whether they have saved. Policy should be tested against retirement income stability and downside protection – not participation or pot size alone.
Design for constraints, not ideals
The system must reflect limited capacity to save and imperfect working lives. Contribution structures, incentives and support should work for those with low, volatile or interrupted earnings – not just median earners.
Be deliberate about risk
The current allocation of risk onto individuals is a choice.
Policymakers should actively consider mechanisms for pooling and smoothing, whether through defaults, collective models, or employer structures, rather than assuming individual responsibility is the baseline.
See adequacy as structural
Adequacy is not just about how much goes in, but how the system behaves.
Improving outcomes should focus as much on decumulation, risk management and support as on increasing contribution rates.
Retain a meaningful role for employers
A system overly reliant on individuals is inherently fragile.
Employers should remain central to contribution, governance and – where possible – risk-sharing, rather than being treated as passive conduits.
Keep the state simple, stable and credible
Confidence depends on clarity.
In practice: avoid overly complex or punitive interactions, particularly where support is withdrawn in ways that discourage saving or create uncertainty.
These are not exhaustive, nor do they remove the trade-offs. But they shift the focus, from adjusting parameters to questioning whether the system delivers the outcomes we want. A new Prime Minister cannot change the constraints, but can change the conversation.
Read more: The future of the State Pension: what’s changing and what’s here to stay
Get in touch with our Pensions Administration & Advisory team
Important Information
This article is provided for information purposes only and does not constitute investment advice or a personal recommendation. The views expressed are those of the authors at the time of writing and may change. Pension outcomes will vary depending on individual circumstances
