NEARLY one in three pensioners could retire in poverty if Rachel Reeves pushes ahead with her Budget pension plot.
The government previously projected that 4.6million people will not have the minimum amount of cash required to cover their retirement.
This currently stands at £13,400 per year in savings for a single person and £22,600 per year for a couple, according to Pensions and Lifetime Savings Association (PLSA).
But a new Freedom of Information (FOI) request submitted to the Department for Work and Pensions (DWP) by pension consultants Lane Clark & Peacock, has shown the number of workers who will not have this amount of cash saved could be much higher.
That is because retirement figures used by the DWP assume that the triple lock will continue for the next 50 years.
The triple lock is a metric used by the government to increase the state pension every year by inflation, wage growth or 2.5%, whichever is highest.
However, if this measure was scrapped and the state pension increased solely by the rate of inflation each year it could leave around 11.7million falling short.
That equates to one in three of today’s workers, the pension group has now warned.
Meanwhile, if the state pension rose each year solely based on earnings growth then around 6 million workers could end up being short of cash in retirement.
The policy has been in place since 2010 and prior to this the state pension was increased in line with prices, using the RPI inflation measure.
Steve Webb, partner at LCP, said; “These shocking figures reveal that the true state of under-saving for retirement in Britain is far greater than has previously been admitted.
“Very few people expect the triple lock to continue for another fifty years, yet this is the basis on which the Government has so far published estimates.
“If the triple lock were to be replaced by an earnings link, millions more people would face a sharp drop in their standard of living when they retire.
“And a prices link, as was the policy until 2010, would see around one in three of today’s workers set to retire short of even a bare ‘minimum’ standard of living.
“Against this backdrop, the Chancellor should be taking measures in the Budget to boost pension saving, not undermine it.”
A DWP spokesperson said: “We are committed to the Triple Lock for the rest of this Parliament, and this means millions will see their yearly State Pension rise by up to £1,900.
“For those who need extra support, Pension Credit – worth on average around £4,300 a year – is available with an additional 57,000 pensioner households receiving it last year when compared to the year before.
“Through our Pension Scheme’s Bill, the average earner could see their pension pot boosted by £29,000 and we have also revived the Pensions Commission to tackle the complex barriers stopping people from saving enough for retirement, helping to build a future-proof pensions system that is strong, fair and sustainable.”
How the upcoming budget could target pensions for workers
The warning comes ahead of the Budget next week, with Rachel Reeves rumoured to be targeting workers pensions to help plug a hole in the public finances.
One of the measures the Chancellor is still considering is a cap on salary sacrifice schemes.
Employers offer these schemes to lower your salary in return for putting the difference into your pension or giving you company benefits.
By doing this you and your employer both pay less National Insurance as your salary is lower.
At the moment there is no limit on how much you can pay into your pension using salary sacrifice.
But the Chancellor is considering capping the amount of tax-free salary sacrifice you get a year at £2,000.
The Chancellor is understood to be considering the move to raise £2billion a year.
Elsewhere, Rachel Reeves is reportedly weighing up cutting the current tax-free £20,000 Isa allowance to £12,000.
She hopes the measure will encourage savers to invest in stocks and shares.
But experts have criticised the move and said it will discourage saving.
Meanwhile, building societies have warned that slashing the amount you can pay into an Isa could reduce their ability to lend money in the form of mortgages.
How to boost your pension
When you retire you will be entitled to the state pension.
You may also have a private pension if you and your employer made contributions to it while you were working.
Under the triple lock policy, the state pension goes up each year by either inflation, 2.5% or average earnings growth – whichever is the highest figure.
The Office for National Statistics (ONS) has published revised estimates of the growth in average earnings in the year to May-July 2025.
It showed that total pay including bonuses for the three months to July was actually 4.8%, higher than the previously estimated figure of 4.7%.
This means the annual rate of the new state pension – which is for those who reached pension age after April 2016 – is around £10 higher than if the increase had been based on last month’s reading.
Under new revisions, the new state pension is expected to increase to £241.30 a week.
You need a minimum of ten years of national insurance contributions to get any state pension.
But you may have gaps in your record if you took time off work, for example to raise a family or care for a loved one.
Fortunately, you can purchase years or use free credits to top up your contributions.
If you’re below the state pension age, you can check your state pension forecast by visiting gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.
You can also contact the Future Pension Centre by calling 0800 731 0175.
If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.
You can contact this service in several different ways by visiting gov.uk/contact-pension-service.
