An MP has proposed plans to lower the age for auto-enrolment from 22 to 18 and to extend the scheme to lower and part-time earners.

Conservative MP Richard Holden has tabled a motion to extend automatic enrolment for debate in the House of Commons today.

His Pensions (Extension of Automatic Enrolment) Bill would see working 18 to 22-year-olds, and those who work part-time or receive low pay, automatically enrolled into a pension scheme.

Under the current auto-enrolment rules automatic saving does not kick in until the worker is earning over £10,000 a year and is over the age of 22.

A report from think tank Onward today suggested that abolishing the £10,000 earnings trigger and the £6,240 lower earnings limit, as well as reducing the age threshold, could see a full-time worker on the national living wage gain a 60% increase in their workplace pension savings.

It said that by making these changes through a phased approach, a worker with two part-time jobs could see their pension savings triple once the new rules were in force.

The think tank said that younger workers could save an extra £20,267 for retirement.

The report by Onward said the two measures could add £2.77trn to the UK’s retirement savings.

Mr Holden MP said: “Auto-enrolment has been one of the massive hidden triumphs of the last decade in the UK, but sadly millions of hard-working British people aren't benefitting because they're under 22 or simply not working enough hours. I want to change that.

“In 2017 the Government said that it would look at extending auto-enrolment by the mid-2020s but to hit those dates we need legislation now to make it happen and allow business time to phase in these important changes. That's what my Bill will do.

“Nothing could show clearer intent towards long-term levelling up than ensuring that everyone who works hard will see a safer and more secure retirement and I hope that the Government backs my campaign for action now.”

The Department for Work and Pensions has previously said it plans to extend auto-enrolment, but not until the mid-2020s.

Jon Greer, head of retirement policy at Quilter, has criticised the timing of the proposed auto-enrolment changes.

He said that implementing a lower age for auto-enrolment at this time risks increased opt-out rates and poor engagement given the precarious financial situation of many young people at the moment.

He added: "While there is no disagreement that automatic enrolment has been a resounding success and that the government should consider expanding it to those not currently captured by the legislation, it doesn’t seem that making the change in the short-term is appropriate.

"There is still considerable uncertainty in the economy, particularly in those sectors that tend to employ lots of younger workers on fewer hours, including hospitality. The increased costs associated with expanding AE in these sectors will likely be unpalatable for the government at this time, particularly as they are also being lobbied for a support package for the businesses most impacted by tighter restrictions."

Tom Selby, head of retirement policy at AJ Bell, said that there is a debate to be had about whether auto-enrolment is appropriate for low earners.

He said: "For very low earners in particular it is likely immediate priorities – such as paying bills and building up a rainy-day fund if they can afford to – will be more important.

"The need to build greater short-term financial resilience – exposed so brutally by lockdown -may be considered at least just as important as boosting longer term savings.

"What’s more, the full flat-rate state pension currently pays £9,339 a year, meaning for anyone earning less than this it represents a ‘replacement rate’ of over 100%. Many would argue this safety net justifies excluding those earning below £10,000 from auto-enrolment – although of course there are no guarantees over how much the state pension will pay or when it will be paid over the long-term."