Employers must take a far more proactive role in tackling the UK’s worsening retirement adequacy crisis or risk being forced into a “one-size-fits-all” solution by the government, Hymans Robertson has warned.

In a survey of 500 employers, published as part of Hymans Robertson's three-year Retirement Adequacy Project, more respondents said employers should be most responsible for helping individuals achieve an adequate retirement income than any other stakeholder, including government, providers or individuals.

The paper, which framed the adequacy challenge as an emerging “social contract” issue for employers, also noted that policymaking to date has largely focused on expanding employer duties, suggesting further intervention may follow if adequacy levels fail to improve.

According to recent data from the Department for Work and Pensions (DWP), 47 per cent of low earners will miss the “minimum” standard of retirement (estimated at an income of around £13,000 a year), 95 per cent will miss the “moderate” standard (around £32,000 a year) and 98 per cent will miss the “comfortable” standard (around £44,000 a year).

With this in mind, Hymans Robertson head of corporate, Leonard Bowman, stressed that retirement adequacy had become “one of the most pressing challenges facing individuals in the UK today”, warning that the risks for employers “are wide ranging and serious” if the issue continues to be overlooked.

While individuals, providers and the state all play a role, Bowman argued that employers remain the only stakeholder with both the “reach and influence” needed to drive meaningful change.

“They connect employees with providers and hold a position of trust with employees due to the employment relationship. That’s why employers can make such a difference," he argued.

“One way or another, employers will be the driving force for positive change - the question is whether this will be on a proactive or reactive basis.”

Bowman added that acting early would allow employers to address adequacy “in ways that best align with their strategic priorities, rather than being caught on the back foot”, highlighting opportunities in innovative benefit design, clearer communications and stronger financial wellbeing programmes.

Hymans Robertson actuarial consultant, Mark Stansfield, echoed the call for urgency, warning that employers who wait for the forthcoming recommendations of the Pensions Commission may lose control over how adequacy is addressed within their own organisations.

The government revived the Pensions Commission as part of its work to explore the barriers stopping people from saving enough for retirement, with the commission set to share its final report in 2027.

“We believe employers would rather take a voluntary and comprehensive approach to make positive strides to tackle the crisis, in a way that fits the specific requirements of their employees,” said Stansfield.

“The alternative could be a mandated ‘one-size-fits-all’ approach set out by the government.”

Stansfield added that moving now gives employers the chance to shape solutions that align with business priorities before any potential tightening of regulation.

“Employers need to act now to make retirement adequacy a reality for their workforce,” he urged.

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