UK Proposes Lifetime Pension Default for 17 Million Workers as 46% Cashed Out Pots
Updated
Updated · The Guardian · Nov 3
UK Proposes Lifetime Pension Default for 17 Million Workers as 46% Cashed Out Pots
3 articles · Updated · The Guardian · Nov 3
Summary
17 million private sector workers would be offered a default retirement option paying income for life under UK government proposals unveiled Tuesday, while still keeping the right to withdraw or reinvest their pension savings.
46% of pension pots first accessed in 2025-26 were emptied out, the government said, underscoring concern that retirees are depleting savings too quickly and falling back on the state pension.
The guided-retirement plan would revive a simple lifetime-income option—often inflation-linked—after the decline of final-salary schemes and the 2015 removal of the obligation to buy an annuity.
Auto-enrolment has expanded pension saving since 2012, with nine in 10 eligible private-sector workers now contributing versus four in 10 then, but industry groups said savers must still retain freedom of choice.