Topic: Auto-enrolment

People’s Pension launches new tool to help savers understand long-term impact of pension transfers

Leading workplace pension scheme People’s Pension1 has launched a Pension Consolidation Calculator2, a new tool designed to help pension savers understand the long-term impact of different charges when transferring pensions.

The tool allows savers to compare charges across different pensions, see long-term savings projections and understand how even slight percentage differences between charges affect retirement outcomes.

The launch coincides with a study People’s Pension has conducted3 which highlights that many savers only understand the impact of different charges when transferring pensions if presented with tangible examples. However, the long-term impact of moving a pension to a higher charging scheme is significant. Analysis4 shows that a 30-year-old average earner moving a £10,000 pension pot from a provider charging 0.4% to one charging 0.75% would be left £32,834 worse off when they retired at 67.

The need for a simple comparison tool to compare charges is highlighted by the organisation’s previous research5, which revealed nearly three-quarters (72 per cent) of people who transferred a pension were unaware of the fees associated with their new or old pension, and 11 per cent were unaware that their new pension had any charges at all. The launch of the Pension Consolidation Calculator aims to address these knowledge gaps and help savers make better decisions for their retirement futures.

The Pension Consolidation Calculator follows from the scheme’s Pension Overview6 webpage, which provides key considerations, such as investment performance and service, for savers before transferring pensions, as well as a one-page document7 integrated into the online transfer process, highlighting the importance of charges, investment performance, and service.

The profit for people organisation is calling for greater collaboration from the pensions industry to allow people to compare their pensions based on the information that matters most. They are calling for:

  1. A requirement for pensions providers to display simple, comparable and easy-to-find information on investment performance, charges and customer service.
  2. Pension transfer incentives to be banned.
  3. Pension providers and regulators to work together to create a consumer facing Value-for-Money framework to help savers make more informed decisions.
  4. Commercial pension dashboards to be delayed until Value-for-Money metrics are displayed across all pensions.
  5. An obligation on the receiving pension scheme to flag important differences between pension schemes, which may impact the final retirement pot, when processing a transfer.

Patrick Heath-Lay, CEO of People’s Pension, said:

“The pensions industry does nowhere near enough to help savers understand the impact of charges on their retirement pots when they are considering transferring. This lack of obligation on providers to be more transparent leads to a worrying number of uniformed transfer decisions, which are likely to be significantly detrimental to savers. This is exacerbated by incentives to transfer which often stops people reading the small print. It’s a critical problem because even small percentage differences in charges can have a significant effect on retirement outcomes. Urgent action is needed from the providers and regulators to help people make more informed decisions and to stop them from having to work for years longer before they can retire.

“The launch of our Pension Consolidation Calculator is a fundamental step in addressing this issue, helping savers make more informed decisions about their pensions to help them grow their savings. We believe all pension providers should offer clear, comparable, transparent information on charges so savers can better understand the potential impact of their decisions.”

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New Childcare Act expansion could boost UK pension savings by £1.2 billion

A recent expansion of the Childcare Act could increase the retirement savings of parents by £1.2 billion according to new analysis from leading workplace pension scheme The People’s Pension1.

The Childcare Act2, which was introduced in 2010 to provide 15 hours of funded childcare per week for three and four year olds, was this month expanded to working parents of children from nine months to school age. It is estimated that it will allow 60,000 parents to re-enter the workforce once fully implemented3.

The People’s Pension has calculated that this increased workforce participation could result in a significant increase in pension contributions. At total pension contribution rates of 8%, parents returning to full-time employment could save £333 million over the period in which they benefit from additional childcare funding. This is estimated to grow to £1.2bn at retirement age4.

If contribution rates are increased to 12%5, parents could save just shy of £500m into their pensions, estimated to result in around £1.8bn in additional savings at retirement age.

The individual impact of this would be significant, increasing the pension pot of each individual who returns to work by nearly £20,000, potentially meaning they can retire as much as a year earlier.

While the recent expansion of funded childcare is expected to make it more financially viable for parents to return to full-time employment, even those returning on a part-time basis could substantially increase their pension pots. The People’s Pension estimates that workers returning on a part-time basis6 could contribute an additional £177m to their pensions, resulting in £625m more at retirement.

Nicola Sinclair, Head of Responsible Business at People’s Partnership, said:

“As a nation we are not saving enough for retirement, so it’s encouraging to see that the Childcare Act has the potential to increase workforce participation to a point where it could significantly boost retirement savings across the UK. As well as offering much needed support to young families today, the Act can empower parents to take proactive steps to strengthen their long-term financial wellbeing.


“Having children is a huge life moment and one with big implications for personal finances, but so is retirement. We are encouraged to see the Act has the potential to help with both, immediately and long-term.”

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The People’s Pension calls for greater transparency and collaboration in response to FCA pensions consultation

The People’s Pension1 has published its response to the Financial Conduct Authority’s (FCA) discussion paper on adapting the regulatory framework for a changing pensions market.

With millions of UK savers relying on workplace pensions for their retirement, The People’s Pension is calling for greater transparency and industry-wide collaboration to ensure pension transfer decisions are made in the best interests of savers.

The impact of misinformed transfers

Research from The People’s Pension highlights the significant impact that pension transfers can have on long-term retirement outcomes. Analysis shows that individuals could miss out on as much as 20% of their pension savings due to misinformed transfer decisions, equating to a potential loss of £1.2bn across the UK in just one year.

Further research, conducted in partnership with the Behavioural Insights Team (BIT), found that financial incentives such as free cash offers can lead savers to transfer their pensions without fully considering the long-term consequences. Additional research with Ignition House found that many struggle to assess the impact of pension charges, with some assuming that any fee under 1% is the same, despite the potential for significant financial differences over time.

Five key reforms to improve pension transfers

In response to the FCA’s consultation, The People’s Pension is calling for five key reforms to create a more transparent and consumer-focused pension landscape:

  1. Clear, comparable pension information: A requirement for pensions providers to display simple, comparable, and easy-to-find information on investment performance, charges and customer service.
  2. A ban: Pension transfer incentives to be banned.
  3. A consumer-focused Value-for-Money framework: Pension providers and regulators to work together to create a consumer facing Value-for-Money framework to help savers make more informed decisions.
  4. Delaying commercial pension dashboards: Commercial pension dashboards to be delayed until Value-for-Money metrics are displayed across all pensions.
  5. Mandatory scheme comparisons during transfers: An obligation on the receiving  pension scheme to flag important differences between pension schemes, which may impact the final retirement pot, when processing a transfer.

A more transparent and saver-focused future

Patrick Heath-Lay, CEO of The People’s Pension, said:

“For too long, savers have been left in the dark when making pension transfer decisions – that needs to change. We’ve been campaigning for a step change in transparency, and this consultation is a crucial moment to fix a system that isn’t working in saver’s best interests.

“Our five-point plan sets out practical reforms that would create a more transparent and consumer-focused pensions landscape, helping to secure better retirement outcomes for millions of UK workers. This would ensure people can make informed choices about their future,. While the consultation is a step in the right direction, the industry must now work together to make it happen.”

The People’s Pension looks forward to working with the FCA and the wider industry to implement reform and ensure pension savers receive the clarity and protection they need when making important financial decisions.

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The People’s Pension unveils personalised video statements to simplify pensions for its members

The People’s Pension1 has launched new personalised video statements to help its members better engage with their retirement savings.

The video statements will be securely delivered by the biggest independent UK master trust directly to members via their online account and will include personalised audio and messages that are specific to the individual account. Within the video statement, the member will see how much they and their employer have added into their pot, any tax relief, and result of investment performance. The statement will also show the member the total amount in their pot.

The new personalised video statements will complement members’ annual statements which they will continue to receive either in the post or digitally.

This is the latest innovation in the last 12 months from the not-for-profit organisation, following the launch of a new set of retirement planning tools, member app and financial well-being offering.

Commenting on the launch of video statements, David Meliveo Chief Commercial Officer of People’s Partnership, provider of The People’s Pension, said:

“We continue to improve what we offer our members and the companies they work for, and I am incredibly excited to announce the launch of personalised video statements. It’s another significant step forward for our aim of making pensions simpler, more accessible, and engaging for our members.

“As a company that manages 1 in 5 of the workforce in the UK, it’s important that we find different ways for our hard-working membership to better engage their pensions, enabling them to make better informed decisions about their future.”

A recent study2 of marketing video statistics has revealed that 91 per cent of people have watched an explainer video to learn more about a product or service, and when asked how they’d like to learn about a product or service, watching a short video was preferable (44 per cent).

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Pensions Dashboards could accelerate losses from pension transfers beyond £2 billion

The introduction of Pensions Dashboards could see losses due to ‘poorly informed’ transfers into higher charging pensions soar beyond £2 billion before the end of the decade, leading workplace provider People’s Partnership1 has warned today.

The provider of The People’s Pension, which serves more than 6.8 million members, has shared new data from its Pension Transfer Outcomes Index2 showing losses from savers transferring into higher charging pensions will continue to rise. This trend is expected to increase once Pensions Dashboards, designed to give people an overview of all their pensions in one place, go live for the first time in two years’ time, on 31 October 2026.

New research3 commissioned by People’s Partnership has found that over 4 in 10 pension savers (42%) say they would be likely to use a pensions dashboard to move their pension from one company to another. An increase in transfers will lead to an increase in poorly informed pension transfer decisions, given the difficulties people face comparing their options, leaving many savers vulnerable to making choices that could negatively impact their financial future.

The profit for people organisation is calling for the incoming FCA Value for Money metrics to be clearly displayed on pensions dashboards. This will allow people to compare their pensions based on the information that matters most, such as the fees they are paying. This is supported by its research, which found that a simple way to compare the overall value for money provided by each of their pensions is one of the features over 4 in 10 (43%) pension savers most want to see on a dashboard, after a projection for their pension pot in retirement for over half of savers (53%).

The YouGov research also reveals that a fifth of pension savers (21%) have lost track of a pension. Half (50%) said they are likely to use a pensions dashboard to find any of their missing pensions, meaning millions could now take action on pensions previously lost to them, which could leave them thousands of pounds worse off in retirement.

Patrick Heath-Lay, CEO, People’s Partnership, said: “Pensions dashboards are a ticking timebomb for further detrimental pension transfers. Our research shows that many people find it difficult to navigate and compare their pension options due to overly complex or inconsistent information, leaving them extremely vulnerable in these types of transactions. With the arrival of dashboards, we anticipate this confusion will only intensify, making it even harder for savers to make informed decisions.

“We are very worried that dashboards will increase poorly informed decisions which lead to big losses over time. The risk is particularly severe if providers use dashboards as an opportunity to aggressively market the pensions they offer to consumers, without any way to easily compare options as we know that people don’t shop around for a pension transfer.

“It is vital that simple, easy-to-understand comparisons of value for money are on commercial pensions dashboards when they begin to go live in two years’ time, so people don’t fall victim to offers that seem better than they are and make decisions which they later regret. A simple consumer-facing value for money framework should apply to all pensions, not just relatively low-charging workplace options. Urgent action is needed to stop people from losing thousands of pounds and having to work for years longer before they can retire.”

People’s Partnership has previously revealed5 that nearly three quarters (72%) of people who had recently transferred a pension didn’t know exactly what the fees were for their new or old pension, and one in 10 (11%) didn’t think their new pension had any fees.

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UK’s workplace pension market can learn from Australia’s Net Benefit approach

Policy makers in the UK should look very closely at the success of the Net Benefit measurement used by the Australian pensions industry, the Chief Executive of People’s Partnership1, provider of The People’s Pension, has said today.


Speaking on stage at the Pension and Lifetime Savings Association’s (PLSA) Annual Conference in Liverpool, Patrick Heath-Lay, said lessons should be learned from Australia before consumer-facing value for money metrics are implemented.


Net Benefit is the investment returns delivered to savers of Australian workplace pensions or super funds, after admin fees, investment fees and taxes have been taken out.
Mr Heath-Lay was speaking at a session called Lessons From Down Under, where he was joined on stage by Australian pensions expert Paul Watson, formerly an Executive at the super fund Hostplus and the chair of the debate, Gregg McClymont, a member of the PLSA Board and former shadow pensions minister.


On the issue, Mr Heath-Lay comments:
“There’s a lot we can learn from Australia, particularly when it comes to highlighting value in the product. Net Benefit has been a huge success story and has contributed to the high expectations that Australian savers  have of their pension funds.  In the UK, competition in the pensions market focuses too heavily on cost and non-investment proposition factors and this must change.


“Our experience with members transfers is the vast majority of people don’t consider investment returns or the impact of charges when transferring their pension. It’s vital that savers have a much better understanding of the real value offered by their pension provider – the return their pension is providing them – before considering factors like service and engagement.


“While a VFM framework is being developed for providers, a consumer-friendly version is expected, and we believe a measure like Net Benefit could be a useful consideration. We’ve been working with partners in Australia to explore what this could look like and what would be needed to bring this in in the UK.”


Mr Heath-Lay also revealed People’s Partnership is looking to develop formal relationships in Australia so it can better understand how value for money has been implemented into that market  and develop so it can apply these principles to help improve The People’s Pension’s offering. He also made a call to other UK providers to join forces with People’s Partnership to develop a condensed set of VfM metrics for the industry.


Mr Watson added: “In Australia, value for money has become a legal duty for trustees to act always in the members’ best financial interest.
“Many in the Australian super system see Net benefit return as the most effective KPI for assessing value for money – it captures the actual financial outcomes delivered to members after or all fees, costs, and taxes, providing a clear and comprehensive measure of how well a pension fund is growing members’ savings over time.”


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Next phase of auto-enrolment should focus on flexing pension saving

The first decade of auto-enrolment has improved private pension coverage and boosted people’s pension pots. The Government should now make the next decade focus additionally on flexing pension savings – in order to address the different savings challenges that low, middle and higher earners face – according to major new research published today (Thursday) by the Resolution Foundation.

The report Perfectly Adequate? – funded by People’s Partnership, provider of The People’s Pension to 6.7 million savers – examines whether low, middle, and high earners are saving enough for a decent income in retirement, and what this means for the new Government’s Pensions Review.

The report notes that the Pensions Commission’s first landmark report 20 years ago set benchmarks for assessing whether people were saving enough for a decent income in retirement, known as target replacement rates.

These targets – achieving a pension income equivalent to 80 per cent of pre-retirement earnings for low-earners, 67 per cent for middle earners, and 50 per cent for high earners – were designed to help people smooth their incomes over their working lives and into retirement. It also added a minimum policy target of 45 per cent for median earners.

Two decades on, the report finds that the combination of the New State Pension and auto-enrolment means that workers can expect to reach the minimum policy target, and that fully auto-enrolled low-earners are on track to hit their target replacement rates upon retirement. On the other hand, middle and high earners are some way off track.

However, this does not necessarily mean that all middle and higher earning workers will face an income shortfall in retirement. The report notes that many of these workers are able to use other financial assets to supplement their savings. Indeed, a typical middle earner in their late 50s currently has enough disposable wealth, alongside their pension savings, to secure an adequate income in retirement (though people without wider financial assets remain at risk).

Furthermore, the Foundation says that while low-earners may be on track to hit their target replacement rates upon retirement, they face other savings challenges during their working lives. For example, one-in-three working age adults live in families who have accessible savings of less than £1,000.

Together, the Foundation says this means that while the one-size-fits-all approach has worked well for the first chapter of auto-enrolment, the next chapter will require both a boost to saving rates and a more flexible approach, in order to reflect the different challenges that low, middle and higher earners face.

The report says that default contribution rates into auto-enrolment should continue to rise over the next decade, initially from 8 to 10 per cent. However, the additional funds from this next phase of rising contribution rates should go into an easy-access sidecar savings account, with any balance over £1,000 then flowing into an employee’s pension.

This saving boost, combined with added flexibility, would help low earners balance building up their rainy-day savings while maintaining their current rate of pension saving. It would also help higher earners, who are more likely to already have rainy day savings, to further boost their pension pots.

The report adds that if the Government still wants to get middle and higher earners closer to their target replacement rates upon retirement, and wants to raise contribution rates ever further, it should consider doing so for higher earners only, or during middle and late working age.

The Foundation says that the success of auto-enrolment so far has laid the groundwork for delivering better living standards in later life. The Pensions Review should build on that success, but also tweak it, to complete the job of helping to solve Britain’s longstanding problem of workers not saving enough, however much they earn.

Molly Broome, Economist at the Resolution Foundation, said:

“Twenty years ago, and amid widespread concerns about poverty in later life, the Pensions Commission set benchmarks for how much people would need to save during their working lives to enjoy a decent income in retirement.

“Policies like the New State Pension and auto-enrolment have delivered on their objective of giving everyone a decent minimum level of retirement income. But the job is incomplete. And so the new Government’s Pensions Review, which could set policy for the next decade, should focus on tackling the different savings challenges that low, middle and higher earners face.

“As well as continuing to boost pension saving, auto-enrolment also needs to be more flexible. It should allow low earners to build up rainy day savings that they can draw on before retirement, while higher contributions for higher earners could help them get closer to maintaining their level of living standards into retirement.”

Patrick Heath-Lay, Chief Executive of People’s Partnership, provider of The People’s Pension, said:

“The next phase of the Government’s Pensions Review should decide what pensions policy is trying to achieve before it looks at the case for increasing statutory minimum pension contributions. As this report shows, there are compelling reasons to accelerate reform as the government’s own figures show four-in-ten people are under-saving but, it’s essential that there are clear objectives for the pensions system. It’s impossible to answer questions about whether legal minimum contributions are at the right level without first discussing what level of retirement income pension policy should actually target.

“For millions, the combination of legal minimum pension contributions and the state pension will totally determine their quality of life in retirement. Any conversation about the future of pensions saving needs to start with the question ‘how much is enough?’”  

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Download the full ‘Perfectly Adequate’ research report

Download the full ‘Perfectly Adequate’ research report

Automatic enrolment changes could add £105bn to young adults’ pensions over 50 years

The Government’s decision to extend automatic enrolment to workers aged between 18 and 21 could mean an additional £105bn of pension savings for younger people across the UK over the next 50 years, according to new analysis by People’s Partnership1, which provides The People’s Pension to more than 6.5 million people across the UK.

Following the passing of a new Bill in Parliament last year, automatic enrolment, which has seen nearly 11 million people start saving into a pension since 2012, is set to be extended to workers aged between 18 to 21 by the mid-2020s.

The analysis2 by People’s Partnership reveals that additional pension contributions of £400m per year for 18-21-year-olds will result in an additional £105bn of savings, over the next 50 years, when all returns, fees and further contributions are factored in.

Impact of the automatic-enrolment extension – an example:

  • An 18-year-old with a salary of £15,0004 who contributes 8% to their pension will have £4,900 saved by the time they reach age 22.
  • The amount will add an extra £33,900 to their pension by the time they retire at age 68.
  • This calculation doesn’t factor in wage growth and compounding of additional contributions, so the total amount added to the pension as a result of saving earlier could be much higher.

The not-for-profit pension provider, which reinvests its profits to benefits its members is calling for cross party agreement, with the support of key unions and trade bodies, on a timeline for implementing the vital reforms.

Phil Brown, director of policy at People’s Partnership, said:

“The earlier you can save into a pension the better as it means your money is invested for longer and has more time to benefit from growth in investment markets. So, the Government’s commitment to help younger workers start saving for their future is a huge step forward. But now we need to see promises turned into action, with a cross-party consensus on the timeline for delivering this change, given we have been waiting for this since 2017.

“Automatic enrolment is undoubtedly one of the most successful Government policies in living memory, enabling millions of people to save tens of billions of pounds extra into their pension. It’s absolutely right that the policy continues to develop so that it reaches its full potential and enables as many people as possible to have the opportunity to benefit.

“With nearly 4 in 10 people3 not saving enough for their retirement, the next big challenge for policymakers and the industry is reaching a consensus on how we solve the problem of under saving.”

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Celebrating 10 years of The People’s Pension

I can clearly remember the day The People’s Pension went live to our members – it was also the day that I started in my role as Chief Executive.

Since that nail-biting experience 10 years ago, we’ve been on an incredible journey which has seen us become one of the biggest workplace pension providers in the UK, helping nearly 6 million members to save almost £18 billion for their futures.

In an organisation like ours, we’re focused on looking forward, but sometimes it’s good to look back. This anniversary has given me time to reflect on what we’ve achieved and there is plenty for us to be proud of.

I had the opportunity to talk to Jonathon Stapleton, Editor of Professional Pensions about this – you can watch a clip below where he asked me about The People’s Pension’s auto-enrolment journey over the past decade…

Extraordinary growth from a compelling proposition

I’m not sure I ever thought that the auto-enrolment policy or The People’s Pension would be as successful as they have proven to be. But it was clear early on that that our experience, value driven proposition and quality of service, together with our not-for-profit status enabled us to deliver a compelling proposition to market, to address the challenge of auto-enrolment.

The growth we experienced in the early days was extraordinary – I remember one day when we took on over 1,000 employer customers – and since then, we’ve continued to grow at a consistent rate.

A decade of success

This success has largely been down to our unflinching focus on what is right for the members and putting people above profit; a fact demonstrated by the closure of our B&CE legacy schemes. Moving those pension savers into The People’s Pension, represented better value because the cost of the older scheme’s charges were higher, and the returns are potentially greater for members of the bigger scheme.

The success that we continue to enjoy is also down to the hard work of colleagues past and present. I’m incredibly proud and grateful to them, for everything we’ve achieved together over the past decade.

Continuing to learn and grow

Of course, there have been many challenges along the way, primarily around onboarding so many members and employers, but it has also been tremendously rewarding, especially when we know there is so much more to come. Although 10 years is a significant landmark, it’s only the beginning of our journey to ensure that our millions of members have the means to fund the retirement they deserve.

We’re aware that there’s so much more we can do to support that journey and help our members – now 1 in 5 workers in the UK – to build those financial foundations for life. We’re still at the starting line and are committed to delivering a pension proposition which will continue to evolve and develop with the needs of our membership.

And we continue to grow as an organisation. Our ambitious recruitment plan has seen us add valuable experience to improve the outcomes for our membership. We’re also investing in technology which will meet consumer demands for easily accessible digital products. And we’re getting ready for pensions dashboards, which will really change the pension landscape for the nation’s retirement savers.

Helping members to make the right decision

As we mature, so does our customer base – it won’t be long before an increasing number start making firm plans for life after work. This is a key area of our development and one where there’s an increasing need to provide guidance and support to enable members to make the right decision for them.

Of course, our success so far has been achieved in sync with that of auto-enrolment, which is a shining example of what a successful government policy looks like. We will continue to work closely with policy makers and industry partners to ensure we build on its success and enable even more workers to save for their retirement.

57% of people aren’t saving enough

Our recent research, conducted with the Pensions Policy Institute (PPI), shows that 54% of households and 57% of individuals have not saved enough and are not saving enough. When economic circumstances allow, the government should commit to a plan to implement the Automatic enrolment review: 2017, reviewing auto-enrolment contribution rates over the longer term. Because the consensus is that 8% of banded earnings isn’t enough for people to achieve the retirement income they need.

A fair pension for everyone

One thing our members can be sure of is that we’ll continue to push for more fairness within pensions, because we believe that every worker should have access to a good quality pension, when they want one.

Nobody can predict the future, but I expect the next 10 years with developing pension policy and embedding saving through auto-enrolment will continue to throw up a challenge or two, but one that we at The People’s Pension are fully up for taking on.

information

This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

Millions face a ‘basic’ retirement as they make minimum contributions

Millions of people across the UK wrongly believe they’re saving enough for retirement because they’re contributing the amount required by Government, finds new research from B&CE1, provider of The People’s Pension2.

Its new report, Pension Adequacy: A Pension Saver’s Perspective3, shows that in the tenth year of auto-enrolment, more than half (57%) of auto-enrolment pension savers are making the minimum employee contribution4 that is required by law, and almost two thirds (65%) are receiving the minimum contributions from their employers. The research shows that, in many cases, auto-enrolment contributions are people’s primary source of savings.

The minimum contribution rate of eight per cent of band earnings is likely to only provide a ‘basic’ level of retirement, according to the Pension and Lifetime Savings Association’s Retirement Living Standards5, which outline that savers will need £10,900 for a basic level of retirement, £20,800 for a moderate level of retirement and £33,600 for a comfortable level of retirement for a single person.

Yet the research, conducted by Ignition House, found that just seven per cent of savers are aware they’re only saving enough for a ‘basic’ retirement; the rest foresee a ‘moderate’, or even ‘comfortable’, retirement. Worryingly, four in ten people believe that because the contribution rates have been set by the Government, they are saving enough6.

Commenting, Phil Brown, director of policy at B&CE, said:

“For most workers across the UK, saving something for retirement is better than saving nothing at all – particularly considering your employer also contributes. But we can’t escape the fact that millions of hardworking people are not saving enough for the level of retirement they expect. Affordability obviously plays a role in this, but the research is clear that in most cases, people believe that because they’re saving what they’ve been told to by those who run the country, they’re saving enough.”

The Pension Commission, in 2005, reported that contributions around 16 per cent of band earnings would be required to reach an adequate retirement income, around two thirds of someone’s pre-retirement earnings. It was thought half of this would come from auto-enrolment, and the other half from additional voluntary saving.

However, almost half (43%) of all savers haven’t considered paying more into their pension, almost half (46%) did not know they were allowed to pay in more than the minimum, and two-thirds (64%) of people only had less than £10,000 in additional savings.

Today, B&CE, provider of The People’s Pension, which serves almost 6 million people across the UK, is calling on the Government to set out plans for a review of the minimum contributions required for auto-enrolment and to outline a timeline for implementing the recommendations of the 2017 automatic enrolment review, once economic circumstances allow, which call for workers aged 18 and over to be covered by auto-enrolment, and for contributions to count from the first pound earned.

While there is growing evidence that the minimum contribution needs to increase, the leading pension provider is warning that careful consideration must be given by Government as to whether this is the right course of action, and if so, what level they should be set at and who should shoulder the burden of an increase – the employer or employee.

While low contribution levels are, in part, due to a lack of saver awareness, a substantial proportion of pension savers are already struggling to cover their day to day living expenses and are worried about the rising costs of living.

Fifteen per cent of pension savers reported that they have fallen behind on, or missed, at least three payments for credit commitments or domestic bills in the last six months and 15% are constantly overdrawn by the time they are paid.

Against a backdrop of rising energy costs and inflation, almost half of savers felt that they would need to opt out if employee contribution rates were set any higher, and many savers felt employer contributions should at least match what the employee currently pays.

Melissa Staunton, 30, from Crawley, said: “I don’t have a plan for retirement, and I have a little bit of savings, but not much. If the minimum contribution was to go up, I don’t think I would be able to afford it at the moment.”

Meanwhile, Amber Maidment, 28, from West Sussex, said: “In total, I am paying nearly £100 a month into a pension – that’s a lot of money for me and I am happy with that amount, because it’s going into a savings pot for when I’m older. I didn’t know that you can save extra into your work pension, but I couldn’t really afford to save any more than what I am doing.”

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