Pensions Minister freezes auto-enrolment thresholds for 2026/27

The Minister for Pensions, Torsten Bell, today completed this year’s annual statutory review of the automatic enrolment threshold. In a written statement, he confirmed that all automatic enrolment thresholds for 2026/27 will be maintained at their 2025/26 levels.

Kelly Parsons, Head of DC Proposition at leading independent financial services consultancy Broadstone, commented:

“The decision to maintain the current automatic enrolment earnings trigger and qualifying earnings band for another year is largely a formality and was widely expected.

“While stability and predictability for employers and savers are welcome, freezing these thresholds highlights a deeper challenge around retirement adequacy. Ultimately, improving outcomes will require higher contributions over time, but that is not a straightforward fix. Higher rates risk pushing lower earners to opt out altogether as households juggle competing financial pressures, while increases at the lower end of earnings often deliver only modest gains to pension pots.

“At the same time, holding the auto-enrolment thresholds steady has a quietly powerful effect, akin to fiscal drag in taxation. With the trigger remaining at £10,000 and the qualifying earnings band fixed between £6,240 and £50,270, rising wages mean more employees are brought into pension saving and contributions increase organically, even without changes to headline rates.

“However, this passive mechanism also underlines the urgent need for a broader, more deliberate approach. Improving awareness of the impact of starting late, career breaks and periods of non-saving is just as important as contribution rates, particularly for younger and lower-paid workers.

“The forthcoming work of the Pensions Commission will therefore be crucial. A credible long-term plan is needed – one that balances gradual contribution increases with clearer policy intent across the different pillars of pension provision. Without that, we risk simply storing up larger problems for future retirees and the state.”

Jon Greer, head of retirement policy at Quilter: 

“Automatic enrolment has been one of the most successful public policy interventions of the past two decades, and the decision to prioritise stability while the revived Pensions Commission undertakes its work is understandable. Employers and workers alike value certainty, particularly at a time when many households are still under financial pressure.

“From an employer perspective, it would have been extremely difficult to introduce meaningful changes to automatic enrolment at this stage. Businesses are already facing higher costs following the increase in employer National Insurance contributions announced in Labour’s first Budget, and the prospect of further changes to the National Insurance treatment of salary sacrifice adds to that burden. Against this backdrop, asking employers to absorb higher pension costs as well would have been challenging.

“However, freezing the thresholds should not be mistaken for standing still. As wages rise and the lower earnings limit of the qualifying earnings band remains at £6,240 , more of peoples earnings will be brought into automatic enrolment and a greater proportion of earnings will be subject to pension contributions. In effect, this creates a form of pensions fiscal drag, with contribution levels increasing arguably by default rather than through an explicit policy decision.

“For workers, particularly those on lower incomes, this can feel like a squeeze on take-home pay, even though saving for retirement is clearly in their long-term interests. It reinforces the need for careful sequencing of reform so that improving long-term adequacy does not inadvertently worsen short-term affordability.

“The government is right to recognise that millions remain at risk of under-saving, and the return of the Pensions Commission is a welcome opportunity to look again at how automatic enrolment can be modernised. While the policy has been a clear success in boosting participation, it needs a clear pathway to evolve if it is to better support people in reaching their long-term retirement goals.

“Stability today is sensible, but setting out a clear roadmap for how automatic enrolment will deliver better outcomes tomorrow will be crucial to maintaining confidence in the system.”