The Work and Pensions Committee (WPC) has launched an inquiry into auto-enrolment, focusing on potential reforms to secure better retirement outcomes for lower earners.
The WPC has called for pensions advisers to submit evidence by 26 October.
Currently, minimum auto-enrolment contribution levels amount to 8% of earnings split between employee (5%) and employer (3%), and only for people earning over £10,000.
People on low incomes are more likely to be among those under-saving but also the most exposed to any potential increase in contributions, according to the Government’s Pensions adequacy data.
There are currently no plans in place to increase minimum contributions.
The Government has recently faced calls from across the pensions sector to increase minimum contribution levels under auto-enrolment.
A report from Scottish Widows found that 31% of UK workers were facing pension poverty. While this figure has reduced from 39% in 2025, it could be reduced to just 13% by boosting auto-enrolment contributions by increasing the statutory level of saving from 8% to 12%.
Raising total contribution rates from 8% to 12% on the first £30,000 of salary would increase projected retirement savings by £40,000 on average, according to the provider. For those aged 22–29, the impact is far greater, increasing pots to around £114,000 at retirement.
The pension provider claims that among defined contribution members saving below 12%, should the statutory level of contribution through auto-enrolment increase from 8% to 12% across total salaries, it would drastically reduce pension poverty from 32% to 13%. If the increase were applied only to the first £50,000 of salary the average pot would increase by £55,000, with pensioner poverty also being reduced dramatically to 14%.
Advisers have also expressed concerns about the number of workers opting out under current auto-enrolment rules.
One in ten workers under 30 (9.3%) entitled to join an auto-enrolment pension scheme are opting out, according to research from Lubbock Fine Wealth Management.
Debbie Abrahams, Chair of the Work and Pensions Committee, said: “Last year we looked at the devastating effect of poverty on pensioners – it isolates, damages health and strips people of dignity. The Pension Commission’s finding that we’re on course for tomorrow’s pensioners to be poorer than today’s was shocking.
“This needs to be addressed, and in doing so, policy-makers should be mindful of the burden any fix would place on low-earners, and employers. The committee will seek to inform the Commission’s work by looking at whether minimum auto-enrolment contributions should increase, and if so, when, by how much, and how the cost of any increase is shared.”