MPs launch inquiry into auto-enrolment contributions for low earners

The cross-party Work and Pensions Committee launched an inquiry on 16 September 2026 into how pension automatic enrolment could be reformed, including whether minimum contributions should increase and how the cost of any increase should be shared between employers and employees¹. The committee said the inquiry would examine how auto-enrolment could be reformed to improve retirement outcomes for low earners while ensuring any additional contribution burden is shared fairly².

Minimum auto-enrolment contributions currently stand at 8 per cent of qualifying earnings, split between a 5 per cent employee contribution and a minimum 3 per cent employer contribution, and apply only to people earning over £10,000¹. The committee said 15 million working-age people are undersaving for a sufficient retirement income¹. It noted that people on low incomes are more likely to be among those under-saving but are also the most exposed to any potential increase in contributions, and that small businesses with already stretched resources are exposed to increases in the employer contribution¹.

The Government currently has no plans to increase minimum contributions, but has tasked the Second Pensions Commission with examining ways to secure the pension system's long-term future, its fairness and pension adequacy¹. The commission published an interim report in May that identified the issues needing resolution to improve the system's sustainability and warned that future generations were on track to face poorer retirement outcomes¹. The committee's inquiry will consider whether minimum contributions should rise, the appropriate level and timing of any increase, and how total contributions should be divided between employers and employees².

Committee Chair Debbie Abrahams said:

A Pensions Policy Institute report earlier this year warned that no single reform to auto-enrolment thresholds can protect every low earner from both retirement inadequacy and financial vulnerability during their working lives².

Why it matters for households

The inquiry concerns the auto-enrolment minimum contribution rates that determine what is paid into a workplace pension from qualifying earnings. Any change to those rates would affect the amounts deducted from pay and paid in by employers, but no change has been announced: the Government has no plans to increase minimum contributions, and the committee is examining the question rather than setting rates¹. The committee has said low earners, who are more likely to be under-saving, are also the group most exposed to an increase in employee contributions, and that small businesses could face similar pressure if the minimum employer contribution rose¹. The inquiry also covers the £10,000 earnings threshold at which workers are generally automatically enrolled¹. The Pensions Policy Institute's finding indicates that no single change to thresholds would remove both retirement inadequacy and in-work financial vulnerability for every low earner².

What happens next

The committee is accepting written evidence until 4pm on 26 October 2026². It has not reported a date for publishing findings. Separately, the Department for Work and Pensions has launched a consultation on implementing a small pots default consolidator solution, and an expected state pension increase has been reported³. Further detail on the committee's terms of reference and call for evidence has not been reported beyond the inquiry page and evidence deadline¹.