Calls for the government to make further reforms to auto-enrolment (AE) have grown, with The Investing and Saving Alliance (Tisa) arguing that further research and reform is needed to help savers achieve an adequate pension pot.

Tisa head of retirement, Renny Biggins, said that while AE, the state pension triple lock and multiple pension awareness campaigns have already had a significant, positive impact on the future quality of life in retirement for consumers, further efforts are needed.

He stated: “Tisa research shows that combined with a full state pension, a lifetime low earner contributing the minimum 8 per cent of total earnings is likely to achieve a pension pot which will provide them with a broadly seamless lifestyle transition into retirement.

"However, lower earners which will often be lower aged employees will generally experience wage growth throughout their working lives and the more you earn and the more contribution gaps you have, the greater the contribution level needs to be.

“The question we need to ask is ‘What is the overarching objective that the minimum contribution rate should be achieving for auto enrolled pension scheme members?’. It is a hugely challenging area to address."

In particular, Biggins encouraged the government to maintain momentum following the passing of the AE Extension Bill in 2023, which had cross-party and Department for Work and Pensions (DWP) support, paving the way for the 2017 proposals to be implemented.

"A critical first step towards increasing pension contributions is to consult on the implementation of these proposals, and this should be a priority for government," he said, suggesting that minimum contributions should also be increased incrementally to 10 per cent on a matched basis, by no later than 2030.

"This would only impact the employer, as employees already pay 5 per cent," he pointed out.

"Subsequent independent analysis should then be undertaken to identify the impact that a move to a 12 per cent contribution on a 6 per cent matched basis would have on lower earners and employers."

However, he acknowledged that personal circumstances will vary "significantly", notably with regards to earnings and home ownership, admitting that "one size does not fit all".

Biggins also suggested that, whilst there is currently a single minimum contribution rate, there could be scope for greater flexibility in contribution structures to recognise the personal nature of adequacy, and groups underserved by the current framework.

"Whilst this would add some complexity to the framework, it is reflective of the hugely complicated challenge we are looking to address," he continued.

“And when we consider adequacy, we must consider the state pension, not to mention the 4.2 million self-employed individuals, of which only 8 per cent actively contributed to a pension in 2022/23.

"It is important that any review considers the target income levels that the combination of the two systems is seeking to deliver. This includes changes to the state and normal minimum pension age.”

The government has recently faced growing pressure to make AE reforms as a result of adequacy concerns, wih analysis from the Institute for Fiscal Studies (IFS) revealing that around 5 to 7 million people are on track for inadequate retirement incomes.

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