The interesting thing about the research LCP published this morning is not that pensioner poverty has risen. It is what has caused the rise. Poverty among pensioner couples has stayed broadly flat for a decade. The entire increase has come from single retirees — and the strongest single predictor of which side of that line a client ends up on is not their income, their industry, or how well their business did. It is whether they reached retirement in a couple.
That should stop an accountant in their tracks, because marital status is not a private matter you never see. It is a thing you record. When a client separates, you are usually among the first professionals to know, because the shareholdings move, a spouse comes off the payroll, the dividend split stops working and somebody asks you about the marriage allowance. The event lands on your desk as a series of adjustments. It almost never lands as what LCP's data says it actually is: the moment a client's retirement outcome changed more than any investment decision they will ever make.
What the research found
The paper — Being single in retirement: a key issue for the Pensions Commission?, written by LCP partner Steve Webb and published on 17 August 2026 — is built on a previously unpublished breakdown of official Department for Work and Pensions data. Its findings, as reported by Money Marketing, are these:
- Overall pensioner poverty has risen from 15.7% in 2012/13 to 18.6% in 2023/24, reversing a decade of progress.
- Poverty rates among single pensioners are nearly double those of pensioner couples, and couples' rates have stayed broadly flat — so single retirees account for essentially the whole increase.
- Two-thirds of single pensioners living in poverty are women.
- The number of divorced single pensioners in England and Wales has tripled since 2002, reaching 1.5 million in 2024.
- A further 0.8 million single pensioners have never married — a figure that reflects decades of rising cohabitation, and one that matters because cohabiting partners have no automatic claim on each other's pensions at all.
Steve Webb's summary is worth quoting directly: Issues such as inadequate pension sharing at the end of a relationship and the continuing gender pension gap mean that women in particular are at higher risk of poverty in old age.
Why this population is invisible to the advice market
Here is the part that makes this an accountancy problem rather than somebody else's. The clients LCP is describing are almost exactly the clients the regulated advice market does not reach.
The lang cat's State of Advice Report 2025 found that just 9% of UK adults had paid for financial advice in the preceding two years, delivered by fewer than 5,000 IFA firms. It also found that the average new advised client arrives with a portfolio of around £411,000, and that the average IFA client is 59 years old. Read those two numbers next to LCP's: the advice profession is largely engaged with people who already have substantial assets and are already near retirement. A 51-year-old who has just been through a separation, holds £48,000 in an old personal pension and has no plans to look at it for another decade does not appear anywhere in that market's line of sight.
They do, however, appear in yours. They filed a tax return with you in January. That asymmetry — the profession that can help does not know they exist, and the profession that knows they exist is not the one that can help — is the whole of the advice gap in a single case, and we have written about its general shape in the advice gap and about the division of labour it implies in accountant and financial planner: who does what.
A separation reaches the accountant as a set of adjustments. It reaches the client as a retirement outcome. Only one of those gets written down.
The four moments this shows up in your own year
None of the following requires you to go looking. Each is something a practice already sees and records:
1. The shareholding change. A transfer of shares between spouses, a share buy-back, or a reorganisation following a separation. You will handle the mechanics and the tax. The question nobody asks is what the settlement did to each party's retirement income, and whether the pension was dealt with at all.
2. The spouse who comes off the payroll. One of the most common adjustments in an owner-managed business, and one of the quietest. A spouse who has been on a modest salary for years may have accrued very little in their own name. When that salary stops, so does whatever auto-enrolment contribution came with it.
3. The long-term cohabiting client. This is the one most often missed, because nothing changes on the file — there was never a marriage to record. Cohabiting partners have no automatic entitlement to each other's pensions and no pension sharing available on separation. LCP puts 0.8 million never-married single pensioners in the current retired population, and the cohabiting generations behind them are larger.
4. The single sole trader. No employer contribution, no auto-enrolment, no partner's pension behind them, and a business that has been the retirement plan by default. You see the whole of their financial life once a year and you are the only professional who does.
Putting real numbers on it
Consider a composite, illustrative case — not a real client, and not a prediction about any particular person. A client separates at 52. The family home, worth £420,000 with no mortgage, is offset against the other party's pension of £390,000, and each walks away thinking the split was even. Our client keeps the house. They also keep a personal pension of £48,000 that has had nothing paid into it since 2019.
Fifteen years later the house is still a house. It produces no income, and the client does not want to leave it. The £48,000, growing but unfed, is not going to produce a meaningful income either. The other party has £390,000 of pension and the new state pension behind it. On paper, in 2026, the settlement was equal. In retirement it is not remotely equal, and by then nothing can be done about it — a financial settlement is made once and is extremely difficult to reopen.
The accountant in that story did nothing wrong. They were asked about the capital gains position on the property and they answered it correctly. The gap is that a question was never put: has anybody looked at what this settlement does to your retirement? That question is not regulated advice. It is an observation, and it costs a sentence.
What is being proposed, and what is still open
LCP's paper is addressed to the Pensions Commission, and it puts forward four things for consideration: reforming the tax relief rules on pension contributions made by a higher-earning partner, creating a pension-sharing mechanism for long-term cohabiting couples, investigating whether the 2022 no-fault divorce reforms have reduced the number of pension sharing orders being made, and making joint-life annuities the default option.
None of this is settled, and it is worth being precise about the timetable. The Government revived the Pensions Commission on 21 July 2025. The Commission published an interim report on 19 May 2026 which contained no recommendations — it set out the evidence gathered so far and the areas it intends to examine further. Its final report, with recommendations to Government, is expected in spring 2027. Legislation, if any follows, comes after that.
So the honest position is that structural help is several years away and may not arrive in the form LCP proposes. Meanwhile the clients in question are signing settlements this month, under the rules as they stand. No future reform will reopen those. That is the argument for the conversation happening now rather than waiting for the policy to catch up.
Two things worth doing this week
Run one filter across your client list. Most practice management systems will let you pull clients aged 45 to 60 who file as single, or businesses where a spouse came off the payroll in the last three years. You are not building a marketing list; you are finding out how many people in your own book sit in the group LCP has identified. Firms are routinely surprised by the number. The broader version of this exercise is set out in the six signals already sitting in your client file.
Add one question to the separation checklist. Where your firm has a process for handling the tax and corporate side of a client separation, add a line asking whether the pension position has been addressed in the settlement, and record the answer. If the answer is no, that is worth flagging while the settlement is still open — which is a window of months, not years. The same logic applies to the other end of a client's working life, which we covered in the joined-up exit.
Neither of these is advice, and neither requires any regulatory permission. They are the two points at which an accountant can see something that the person it affects cannot, and say so in time for it to matter.
Common questions
Is a client's marital status really any of our business?
The change in circumstances is already your business, because it changes the numbers you are paid to get right. A separation alters shareholdings, spousal remuneration, dividend planning, the marriage allowance and often the basis on which a property is held. You are not being asked to enquire into anyone's private life; you are being asked to notice a change you have already recorded and to recognise that it carries a long-term financial consequence as well as a tax one. LCP's finding is that this particular change is now the single strongest predictor of poverty in later life. Treating it as purely a compliance adjustment is what leaves the consequence unattended for the next twenty years.
What does pension sharing on divorce actually involve?
A pension sharing order is made by the court as part of the financial settlement, and it splits one party's pension rights by a stated percentage, creating an independent pot for the other party. It is one of three routes — the others being offsetting, where the pension is traded against another asset such as the family home, and attachment, which redirects income later. Offsetting is common because a house feels more tangible than a pension statement, but it can leave one party asset-rich and income-poor decades later. The choice is made once, during the settlement, and it is very difficult to revisit afterwards. That timing is precisely why it matters that somebody raises it early.
Our client is single and self-employed with no pension. Is that not simply their choice?
It is their choice, and it stays their choice. The question is whether it is an informed one. A sole trader with no employer contribution, no auto-enrolment and no partner's pension behind them has none of the structural defaults that carry an employee towards a retirement income. Nobody is nudging them. If the decision to draw everything as income has been made by default rather than deliberately, then the client has not really chosen at all. The useful step is to make the position visible once — what exists, what it produces, what the state pension adds — so that carrying on becomes a decision rather than an omission.
When will the Pensions Commission's conclusions actually be known?
The Government revived the Pensions Commission on 21 July 2025. It published an interim report on 19 May 2026 which deliberately contained no recommendations, setting out the evidence gathered and the areas needing further examination. Its final report, which will make recommendations to Government, is expected in spring 2027. Anything after that requires legislation and lead time, so structural change of the sort LCP proposes is several years from reaching clients. That gap is the practical point: the people affected are making irreversible decisions now, under the rules as they currently stand, and no future reform will reach back to reopen a settlement signed in the meantime.
How do we raise this without straying into regulated advice?
By observing rather than recommending. Noting that a client's circumstances have changed and asking whether their retirement position has been looked at since is an observation about their affairs, not advice on a regulated product. The perimeter is crossed when a firm advises on, arranges or recommends a specific pension, investment or course of action, and that work sits with a firm authorised by the Financial Conduct Authority. In a joined-up relationship the accountant supplies what they can genuinely see — the figures, the history, the timing — and the regulated adviser carries the analysis, the recommendation and the responsibility for it.