IFS Review Reveals UK Pension System Structural Flaws Risking Millions’ Retirement Income

The Institute for Fiscal Studies (IFS) has released a comprehensive review highlighting serious challenges in the UK pension system, warning that millions face inadequate retirement income due to systemic issues in both state and private pensions. Central to the debate is the sustainability of the state pension, particularly the controversial triple lock mechanism, which the IFS suggests replacing in the long term with earnings-linked or inflation-linked increases to ensure fiscal sustainability. The review recommends a new four-point pension guarantee, including a target for the state pension set as a percentage of average earnings, gradual rises in the state pension age aligned with longevity but at a slower rate, and expanded auto-enrolment coverage with higher contributions, especially targeting under-saving groups like the self-employed and women. The IFS also urges that the state pension should never be means-tested and that the government commit to supporting pensioners at risk of poverty, proposing targeted support for those most affected by state pension age increases and housing insecurity. These recommendations come ahead of an expected government review of retirement income adequacy, with calls from experts for decisive and swift government action to reform the pension system to better support future generations. While some experts warn of the high cost of the triple lock, others caution that any changes should be carefully managed to balance fairness and fiscal responsibility.