A private member's bill to outline a roadmap for the extension of auto-enrolment (AE) will be introduced to parliament today (5 January), after research revealed that expanding the initiative could bring a further £2.77trn into pension savings.

A research report from think tank Onward has called for the AE lower age threshold and the earnings trigger to be abolished over a four-year period, concluding in 2026, suggesting that this could could benefit up to 7 million people in the UK.

A person who works two-part time jobs, earning £190 a week in each, for instance, would not currently have to be enrolled when they retire, and if they were, would only save an average of £109,700 by retirement.

Abolishing the qualifying earnings trigger of £6,240, however, would generate £297,600 on retirement, nearly tripling their retirement savings, according to the report.

In addition to this, an 18-year-old starting their first job on £340 a week would not be saving into a pension under the current system until they turn 22, whilst the proposed changes would result in savings of £6,326 from 18 to 21, representing an extra £33,931 at retirement.

A full-time worker on the national living wage would also stand to gain an extra £93,989 over a working lifetime, a 60 per cent increase in their workplace pension savings.

In total, over the whole working lifetime of the current workforce, the report predicted additional savings of as much as £2.77 trillion, which it suggested could serve as additional resources to be deployed in the government’s levelling up agenda.

The government has previously committed to implementing both of the proposed changes as initially recommended by the 2017 review of automatic enrolment, repeatedly pledging to meet a “mid-2020s” timeline for this.

However, the report from Onward suggested that whilst this timescale is right, businesses will need a more concrete roadmap to properly prepare.

It therefore proposed a four-year timeline, which would see the auto-enrolment trigger frozen at £10,000 and the qualifying earnings limit at £6,240, or £120 a week, in 2022.

In 2023, the AE earnings trigger and age limit would be abolished to ensure that every employee over the age of 18 is eligible, but contributions would still only be paid on earnings above £6,240.

The qualifying earnings limit would then be reduced to £100 a week in 2024, £60 a week by 2025 and abolished fully in 2026.

Commenting on the report, MP Richard Holden, who will be introducing the private member's bill later today, said: “AE 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.

“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."

Industry experts have repeatedly backed the 2017 AE recommendations, with The Pensions Regulator recently emphasising the need to enact these reforms in order to continue the "pension revolution".

Such calls for action have also been compounded in light of the recent labour shortage and the impact of the pandemic, with industry organisations emphasising the need for reform to support at-risk savers.

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