Auto-enrolment at 12%? What the pensions review could mean

Auto-enrolment contributions are not rising to 12% yet. The legal minimum is still 8% of qualifying earnings, with at least 3% paid by the employer, and the government has ruled out changing contribution rates during this Parliament. A 12% minimum is under debate ahead of the Pensions Commission’s final report, due in early 2027.

Is auto-enrolment going up to 12%?

No decision has been made. Press reports in October 2026 said a 12% minimum was among the options the Pensions Commission is weighing, but the Commission has not published a recommendation and has not said how any increase would be split between employers and staff.

The Commission’s interim report on 19 May 2026 said any recommendations for change should be “implemented gradually”. The same GOV.UK release confirms the government “has ruled out changes to Automatic Enrolment contributions for this Parliament.”

What are the auto-enrolment rules today?

The minimum total contribution is 8% of qualifying earnings, as set out by The Pensions Regulator since 6 April 2019.

The 2026/27 thresholds were frozen at their 2025/26 levels in DWP’s review of 18 December 2025, partly to avoid prejudging the Commission’s work.

What is the Pensions Commission?

The Pensions Commission is an independent review of whether people are saving enough for retirement. The government launched it on 21 July 2025, overseen by Baroness Jeannie Drake, Sir Ian Cheshire and Professor Nick Pearce.

Its interim report found:

• 15 million people are undersaving for retirement, which could reach 19 million without action
• 45% of working-age adults, about 18 million people, are not saving into a pension
• 89% of eligible employees now save into a workplace pension, up from 55% in 2012
• only 4% of wholly self-employed workers are saving for retirement

It also found that around half of low and middle earners save only at the auto-enrolment minimum.

Who is calling for 12%?

Pensions industry bodies are the main supporters, and all of them want a gradual rise.

• Pensions UK (29 September 2026): 12% of qualifying earnings, split evenly between employers and employees, reached by 2035.
• Association of British Insurers (July 2026): 12% by the end of 2030, with employers paying 3 percentage points more and employees 1 point more.
• Nest: supports a phased programme of reform, without naming a figure.

Employer groups have not published a joint position, and the Commission has not said which, if any, of these it favours.

What could 12% cost an employer?

The cost depends on the split, which nobody has proposed formally. The table below is our illustration only, using 2026/27 qualifying earnings and an equal 6% and 6% split.

On a £30,000 salary, qualifying earnings are £23,760 (£30,000 minus £6,240). The employee’s share at 6% would be £1,426, up from £1,188 at 5%, before tax relief. Employers who already pay more than the minimum, or who pay on full salary, may see little or no change.

Which applies to you?

• If you pay exactly the 3% minimum: you are most exposed to any rise. Model the cost now.
• If you already pay 5% or more: a rise may affect only staff contributions, depending on the split.
• If you use salary sacrifice: check how the salary sacrifice cap from 2029 interacts with any higher minimum.
• If you are self-employed: auto-enrolment does not cover you, but the Commission is looking at self-employed saving.

What employers should do now

1. Keep complying with today’s 8% rules. Nothing changes until legislation is passed.
2. Model a 12% scenario in budgets for 2028 onwards, alongside the National Living Wage rise in April 2027.
3. Check your scheme’s contribution basis, qualifying earnings or full pay.
4. Watch for the final report in early 2027 and any consultation that follows.
5. Talk to your pension provider about how a phased rise would be handled in payroll.

See our guides to auto-enrolment for employers, workplace pension providers compared and the pension tax relief calculator.

Frequently asked questions

Is the auto-enrolment minimum rising to 12%?

Not yet. The minimum is 8% of qualifying earnings, and the government has ruled out changing contribution rates during this Parliament.

When will the Pensions Commission report?

Its final recommendations are due in early 2027. It published an interim report on 19 May 2026.

What is the minimum employer pension contribution in 2026/27?

Employers must pay at least 3% of qualifying earnings, which for 2026/27 are earnings between £6,240 and £50,270 a year.

Who would pay the extra 4% if the minimum rose to 12%?

That is undecided. Pensions UK has proposed an equal split between employers and employees, but the Commission has not made a recommendation.

Do I need to change my payroll now?

No. Keep applying the current 8% minimum and the 2026/27 thresholds until the law changes.