UK Pension Chief Backs Higher Auto-Enrolment Contributions to Tackle Savings

Baroness Jeannie Drake, the UK Pensions Commissioner, argued that increasing minimum automatic enrolment contributions is the most effective way to boost pension savings and address the nation’s retirement adequacy crisis. Speaking at the Pensions UK Annual Conference 2026, she emphasized that voluntary contributions and saver engagement alone cannot resolve widespread under-saving.

Raising Contribution Rates as the Primary Solution

“The efficient way to get more saving, and in my view, the best route to delivering this, is through increasing automatic enrolment minimum contribution rates,” Baroness Drake stated. She acknowledged the trade-offs involved, noting that higher contributions would require employers to adjust remuneration budgets, reduce employee take-home pay, and impact government spending on pension tax relief.

The Scale of the Pension Adequacy Challenge

Baroness Drake highlighted the Commission’s interim findings, revealing that 15 million people are currently under-saving for retirement, with the figure potentially rising to 19 million without intervention. She noted that additional pension saving beyond automatic enrolment (AE) minimum levels remains limited, as voluntary contributions are often driven by employer actions rather than independent decisions by workers.

Evidence suggests the average worker is unlikely to increase contributions voluntarily, despite tax incentives and engagement efforts. Baroness Drake argued that AE’s success demonstrates the effectiveness of inertia-based defaults, providing a foundation for further reforms. However, she emphasized that increasing contribution rates must be part of a wider reform package.

Broader Reforms and Political Commitment

The Commission is examining how the state pension, workplace pension saving, and voluntary contributions interact, alongside the role of investment returns and how savers access their pension wealth in retirement. Baroness Drake cautioned against relying solely on stronger investment performance or economic growth to resolve the adequacy challenge.

Affordability and implementation will be central considerations in the Commission’s forthcoming recommendations, with concerns about the impact of higher contributions on employers and workers. Addressing inequalities in pension saving among women, lower earners, ethnic minorities, and the self-employed is a priority. The Commission is exploring a hybrid approach to measuring retirement adequacy, combining replacement rates with minimum living standards.

Pension reform demands sustained political commitment, as changes must persist across multiple governments to achieve meaningful improvements. Reflecting on the original Pensions Commission’s work two decades ago, Baroness Drake noted that initially challenging reforms had secured cross-party support and transformed workplace pension saving.

“In 20 years’ time, I don’t want the members of another commission standing in front of a Pensions UK conference reminding us of a lost opportunity,” she concluded. “We have a once-in-a-generation opportunity to finish the job that Lord Turner started, and hopefully it is well taken.”