The Society of Pension Professionals (SPP) has urged the Second Pensions Commission to introduce an auto-enrolment (AE)-equivalent system for the self-employed, arguing that voluntary pension saving alone has failed to deliver adequate retirement outcomes for the group.

Responding to the commission's interim report, the SPP said self-employed participation in pension saving is "one of the most urgent challenges for the UK pension system" and warned that it is "difficult to see" how the issue can be addressed without introducing an equivalent to AE.

The organisation argued that the success of workplace AE has demonstrated the effectiveness of inertia in increasing pension saving, and suggested that pension contributions for sole traders could be deducted as a percentage of profits through the self-assessment system, with an opt-out mechanism and a default pension arrangement.

It also suggested that the government could consider establishing a state-backed default pension scheme for the self-employed, potentially through an extension of Nest, while recommending that collective defined contribution (CDC) provision should also be made available to self-employed workers through future retail market reforms.

More broadly, the SPP backed the commission's conclusion that the UK pensions system has "solid foundations" but warned that it is "not currently on track to deliver adequate retirement outcomes for all".

It stated that pension adequacy should remain the central objective of future pensions policy and called for a clear roadmap to higher levels of pension saving.

The response argued that current minimum AE contribution rates are insufficient to deliver adequate retirement incomes and proposed introducing nationally recognised Bronze, Silver and Gold pension-saving standards to encourage higher employer contributions.

Under the proposals, a Bronze standard would require total pension contributions of 12 per cent of pensionable earnings, compared with the current statutory minimum of 8 per cent, while Silver would require 15 per cent and Gold would represent a voluntary target of 20 per cent.

The SPP also reiterated its support for extending AE to younger workers by lowering the minimum enrolment age from 22 to 18, removing age limits for older employees who continue working beyond state pension age, and tackling pension participation gaps affecting women, ethnic minority groups, disabled people and carers.

Alongside changes to accumulation, the organisation called for stronger retirement income defaults, continued expansion of CDC provision, improved financial education beginning in primary schools, and greater access to pensions guidance and regulated financial advice.

It also proposed exploring changes to the tax-free pension lump sum so that the 25 per cent entitlement could be taken gradually alongside retirement income rather than solely as an upfront lump sum.

SPP DC Committee chair and a member of the SPP adequacy working group, David James, described pension adequacy as one of the "most defining financial challenges of our generation".

"We cannot rely on an approach that has a track record of being ineffective, with over 15 million people not saving enough for their retirement," he continued.

"We need an actionable framework that changes public psychology, supports employers, and ensures structural fairness across every generation and career path."

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