45% of adults think pension auto-enrolment is enough. It isn’t

In 2012, the government introduced pension auto-enrolment, a landmark piece of legislation designed to increase retirement savings in the UK.

Aiming to get more people saving into pensions, this introduced laws requiring employers to provide and contribute to a workplace pension for eligible employees. Those employees then also contribute a portion of their pensionable earnings to their pots.

Auto-enrolment has no doubt had the desired effect of increasing the number of people saving for retirement. According to figures from the Department for Work and Pensions (DWP) reported by Money Marketing, almost 90% of eligible employees in Britain were saving into a workplace pension in 2024.

However, while the number of people saving into a pension has increased, that doesn’t necessarily mean they are saving enough. Although auto-enrolment sets minimum contribution requirements for employees and employers, these amounts may not be enough for a comfortable retirement.

Concerningly, Standard Life’s Retirement Voice 2025 survey suggests that’s exactly what UK adults think. Data shows that:

• 45% of employees with a defined contribution (DC) pension believe being automatically enrolled means they’re saving enough for retirement.
• That rises to 61% for Generation Z individuals (those born between the mid-1990s and early 2010s) and 51% for millennials (early 1980s and mid-1990s).
• Older generations are less likely to believe this, with 36% of Generation X individuals (mid-1960s and late 1970s) and 26% of baby boomers (late 1940s to mid-1960s) saying the same.

These figures suggest that many UK adults neglect to contribute more into their pensions because they mistakenly believe that the auto-enrolment minimum saving level is sufficient for their retirement. This could leave them at risk of not saving enough for later life.

Find out how auto-enrolment works and why contributing more than the minimum might be important for you to live your desired lifestyle in retirement.

You’ll contribute at least 8% to your pension if you are eligible for auto-enrolment

First, it’s important to understand how auto-enrolment works.

All employers must provide a workplace pension scheme. You will typically be eligible for auto-enrolment in that scheme if you:

• Are classed as a “worker”
• Are aged between 22 and the State Pension Age (66 in 2025/26, rising to 67 by 2028)
• Earn at least £10,000 a year
• Usually work in the UK.

Your employer will typically need to enrol you in their pension scheme if you meet these criteria, although there are other instances when your employer may not need to do this.

This might apply if you have already given notice that you’re leaving, if your employer has given you notice, if you’re from an EU member state, or if you’ve opted out of the scheme. Check the government website for details if you’re unsure whether you’re eligible for auto-enrolment.

If you are eligible, you and your employer must both make at least a minimum level of contributions to your pension on “qualifying earnings”. In 2025/26, this is on earnings between £6,240 and £50,270 a year before tax.

The minimum contribution levels on this income are:

• 5% of your pensionable earnings contributed by you, made up of 4% of your salary and 1% tax relief
• 3% of your pensionable earnings, contributed by your employer.

In total, that means you and your employer must pay at least 8% of your qualifying earnings into your pension.

Your employer may pay more, either as a benefit or as matched contributions if you voluntarily contribute over the minimum. However, they are not obliged to.

Meanwhile, you may also choose to personally contribute more than the minimum amount to help achieve a comfortable retirement lifestyle.

The auto-enrolment minimum amounts may not be enough for a comfortable retirement

In 2023, Standard Life produced an interesting example of how you might build up a pension under auto-enrolment.

Imagine that you start saving into your pension at 22, with a salary of £25,000 a year. Assume that you achieve 3.5% salary growth a year, and your pension investments generate 5% annual growth with a 1% investment charge.

By 66, you would have a pension worth £434,000, which may seem sufficient to maintain your desired lifestyle.

However, when compared to Pensions UK’s Retirement Living Standards, a projection of how much it costs to afford retirement depending on your spending habits, the outlook may seem a little different.

Their figures show that, for a single person, it would cost £43,900 a year to afford a comfortable retirement. At that rate, assuming minimal growth on your savings as you begin to draw them, you’ll exhaust your pension in about 10 years.

Even a moderate retirement will cost you £31,700 a year as a single individual. In that case, you could use your entire pension in 14 years.

For couples, these figures are slightly more forgiving. According to the Retirement Living Standards, couples would need:

• £60,600 a year for a comfortable lifestyle
• £43,900 a year for a moderate lifestyle.

Assuming you and your partner both saved into pensions from 22, a comfortable lifestyle could see you deplete your savings in 15 years. That rises to 20 years for a moderate lifestyle.

So, while the £434,000 from auto-enrolment might sound like a lot, it could be insufficient for your desired living standard in retirement.

Increasing contributions now could help you build the savings you need

With these figures in mind, you may want to consider increasing your pension contributions. Even a modest boost could make a substantial difference to the overall size of your fund.

Standard Life provides good examples of this. Again, imagine being 22 and contributing to your pension for the first time. If you contributed 12% of your earnings instead of the minimum 8%, and with the same assumptions in play, you would have £651,000 in your pension by 66.

Increasing those contributions later in your career can still provide a useful boost, too. For example, you could save £537,000 if you increased your contributions to 12% from 44 to 66.

Even increasing them to 12% just from 60 to 66 would see your pot increase to £461,000.

All this to say, you could save what you need in your pension simply by increasing your contributions.

The sooner you start, the larger your savings will likely be. And, if you’re already later on in your career, you can still benefit – it’s never too late to start planning for the retirement you want.

Get in touch for personalised support with your pension savings

If you’d like personalised support organising your wealth for later life, get in touch with us at Kellands.

An award-winning financial planning firm based in Hale, Cheshire, our experienced financial planners will provide tailored advice specific to you and your life goals.

Email us at hale@kelland.co.uk, or call 0161 929 8838 to find out how we could help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pensions Regulator.

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