An expert has explained what it means06:41, 03 Aug 2026Updated 07:06, 03 Aug 2026Official figures published last week highlighted a seismic change in the UK’s retirement landscape.‌They showed that more pensioners were now having to cope without the guaranteed income that previous generations had enjoyed. When assessing private pensions accessed for the first time, the Department for Work & Pensions ( DWP ) found that the proportion of people receiving a lump sum or other Defined Contribution product rose from 37% (280,000) in the 2016/17 financial year to 49% (410,000) in the 2025/26 financial year.‌Samuel Mather-Holgate, managing director and Independent Financial Adviser at Mather and Murray Financial, explained what this means in plain English.‌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.”With a DB pension, the employer effectively guarantees the income a person will receive in retirement, whereas with a DC pension the income generated depends on the size of the pot and market performance, as well as fund fees. In short, the pensioner is vulnerable to how much they have saved and what markets do — rather than the employer.‌Samuel added: “People with DB pensions, whether final salary or career-average, such as the NHS CARE scheme, have a security in retirement that most private sector workers will soon no longer enjoy. A generation of workers has effectively been switched from a retirement promise to a retirement savings account, often without fully understanding the difference.“And this is the point at which a person’s failure to invest appropriately for their retirement comes home to roost as the State pension will prove woefully inadequate for most.”Samuel said the UK was now entering the age of ‘pension inadequacy’, one where responsibility and risk had shifted from employers to individuals, many of whom simply haven’t saved enough to have the retirement they would have liked. While he accepted that auto-enrolment (AE) had been a major step forward, with millions now saving into pensions and receiving employer contributions, the minimum contributions many make through AE will simply not be enough to fund a retirement that could last for 30 or even 40 years.‌Samuel continued: “AE should be the starting point, not the whole retirement plan but, due to a lack of education around pensions, that is what it has become.”Samuel urged people to put as much as they could into their workplace pension so that they could get the maximum benefit from the employer contributions. He said: “Failing to maximise matching contributions is effectively turning down part of your pay.”He also urged people to review their pensions regularly, particularly after changing jobs, receiving a pay rise, divorcing, inheriting money or approaching retirement.‌Ultimately, he warned: “Britain, as the latest DWP figures reveal, is now formally moving from guaranteed retirement incomes to incomes based on personal responsibility, but too many people have not adjusted their savings accordingly.“Yes, we’re in a cost of living crisis and finding any money spare at the end of the month is challenging but people need to have one eye on the future and save as much as they possibly can.Article continues below“As people’s retirement incomes become dependent on what they have invested, literally every penny invested into a pension counts.”