Experts warn the UK's current pension system does not guarantee individuals a comfortable retirement in later life
A dramatic transformation in Britain's retirement landscape has been laid bare by newly released data from the Department for Work and Pensions (DWP).
The DWP figures reveal that among private pensions being accessed for the first time, nearly half of qualifying Britons drew from Defined Contribution (DC) products in the 2025/26 financial year.
That marks a sharp increase from 2016/17, when the equivalent figure stood at just 37 per cent, representing 280,000 individuals.
The numbers point to a growing cohort of retirees who must now manage without the guaranteed income that earlier generations took for granted.
Instead of receiving a secure pension paid until death, an ever-larger share of the population is relying on savings pots whose longevity depends entirely on market performance and personal planning.
Samuel Mather-Holgate, managing director and independent financial adviser at Mather and Murray Financial, described the country as entering an era of "pension inadequacy."
He said: "Essentially, we are now transitioning from the gilt-edged 'Defined Benefit' pensions of old where income was guaranteed until death to pensions based on 'defined contributions', where a pot will last as long as it can and is at the mercy of markets. And it's a shift that is accelerating."
Those holding DB pensions, whether final salary or career-average schemes such as the NHS CARE arrangement, enjoy a level of retirement security that most private sector employees will soon lack, he warned.
He added: "A generation of workers has effectively been switched from a retirement promise to a retirement savings account, often without fully understanding the difference."
The retirement system cautioned the state pension would prove "woefully inadequate for most" when it comes to post work life.
Mr Mather-Holgate acknowledged that auto-enrolment had represented a significant advance, bringing millions of workers into pension saving and securing employer contributions for the first time.
However, he stressed that the minimum amounts many people contribute through the scheme fall far short of what is needed.
With retirements now routinely stretching to 30 or even 40 years, the sums being set aside by default simply cannot sustain a comfortable standard of living over such a lengthy period.
He argued the fundamental problem is that both responsibility and risk have migrated from employers to individuals. Many of those now bearing that burden have not put enough aside to fund the retirement they had envisaged, leaving them exposed as the old guarantees disappear.
Mr Mather-Holgate sounded the alarm that Britain is "now formally moving from guaranteed retirement incomes to incomes based on personal responsibility, but too many people have not adjusted their savings accordingly.".
He recognised the difficulty of finding spare cash amid the ongoing cost of living crisis, but urged workers not to lose sight of their long-term financial futures.
