In the past week, it’s been near impossible to escape pension news – and we’re not just talking about our One Million More Campaign!
In fact, pensions have been hitting the political headlines, most notably when it comes to potential changes to auto-enrolment.
The majority of us have likely heard the term auto-enrolment before, be it at work, on the news or discussing it with friends. But sometimes it can be hard to nail down what it actually is and how it impacts you.
Luckily, your friends at My Pension Expert are here to help!
What is auto-enrolment?
Auto-enrolment is a UK government initiative that was introduced in 2012 to help more people save for retirement. Before it was launched, many workers didn’t have a pension outside of the State Pension, often because they hadn’t signed up for one themselves.
To solve this, auto-enrolment makes it a legal requirement for employers to automatically enrol eligible employees into a workplace pension scheme. This means if you’re over 22, earn above a certain amount, and work in the UK, you’re likely to be enrolled in a pension by your employer – without having to ask.
Under auto-enrolment, a minimum of 8% of your earnings (between £6,240 and £50,270 a year) must go into your pension. This is usually made up of 5% from you (which includes tax relief from the government) and 3% from your employer. This money is put aside automatically each payday to help you build up savings for retirement.
The goal is to make saving for retirement easier and more accessible, so more people have money set aside for their future. The question is, has it succeeded?
Did it work?
Since the introduction of auto-enrolment 13 years ago, the percentage of eligible people saving for their retirement via the scheme has increased from 55% in 2012 to 88% in 2025.
These figures speak to the success of automatic enrolment and how the scheme’s ability to get more people saving has improved the prospect of retirement for millions across the country.
A large reason for this is the fact that auto-enrolment has made saving so much easier than it used to be. So, people have been able to budget in ways that already had pension contributions automatically factored in- one less box that needed to be ticked.
The simplicity of auto-enrolment becomes particularly important for younger people where retirement seems a long way away. Because getting on the career ladder and earning money can be understandably exciting where immediate desires can take priority; refreshing your wardrobe, the newest phone or a quick holiday- we all know the feeling.
That said, auto-enrolment has not solved all pension-related problems. Whilst saving is now easier, many employees consider pensions to be automatically taken care of. Retirement planning isn’t just about saving. It’s regularly checking in on funds and making informed decisions with your money to set you up for a financially comfortable future.
The passive saving of auto-enrolment runs the risk of people not really checking in with their finances or assessing how much more they need to save to achieve a financially secure retirement.
The future of auto-enrolment
The good news? The government is seeking to solve these issues. Recent headlines provide some optimism, including the government’s revival of the Pensions Commission and upcoming pension reforms.
There is an expectation that the commission will review the minimum pension contribution levels. While the report isn’t expected until 2027, if this was the case, it could mean that employees could start to contribute more. But this is no cause for concern; it’s important to remember that an increase in minimum contributions could be beneficial in the long run.
That said, there’s action you can take now to make sure you’re on top of your workplace pension. Taking the time to understand your pension can help you to understand where you are on your savings journey, and whether you need to take action,
What you can do
Taking a look at your pension- whether you receive regular written updates from your provider, or you use the government’s pension tracing service to track them down- could be a simple first step on a trajectory towards achieving those retirement goals.
And remember, if you’re not sure, you can always speak to an expert, like a helpful member of the team at My Pension Expert. The team can help you understand how much you currently have saved, your future goals, and the steps you can take to achieve them with a personalised recommendation. They’ll give you the peace of mind that you can remain on-track.
Auto-enrolment has undoubtedly been a game-changer when it comes to pension saving. However, it’s important to not to be too passive with these savings. Taking that step to understanding your workplace pension could be just what you need to transform your future finances and shape the retirement that you want.
As more details about the future of auto-enrolment come out, My Pension Expert will be here to help you navigate and understand what any changes may mean for you.
Take control of your retirement today.
Auto-enrolment is a great start – but it’s just that, a start. Speak to a friendly expert at My Pension Expert to understand your pension savings, plan for the future, and make sure you’re on track for the retirement you deserve. Find out more about how we can help.
