Why auto-enrolment might not be enough for your future

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Many people believe that auto-enrolment means they’re saving enough for retirement. In reality, though, it’s just the foundation. Taking a few simple steps today can help you plan for a better future.

Saving 8% of your annual earnings is the minimum amount required by auto-enrolment legislation. It’s a good starting point, but` for many people, 8% won’t be enough to live the life they want in retirement.

With bills to pay and higher expenses to consider, increasing your pension contributions may be low on the agenda. That’s why understanding some of the more common misconceptions about auto-enrolment can help to give you some extra clarity on what your options are – so you can make more informed decisions about your pension.

To start, let’s take a look at how auto-enrolment works and what it’s designed to do.

What is auto-enrolment?

In 2012, the UK Government introduced auto-enrolment to tackle undersaving for retirement and encourage more people to save through their workplace pension.

Today, if you’re employed in the UK, over the age of 22 and earning more than £10,000 a year (or £192 a week), your employer must automatically enrol you into a workplace pension. They don’t need to ask you to join.

The minimum contribution to a workplace pension is 8% of your annual earnings. 5% comes from your salary and your employer tops up the rest by adding 3%.

Why saving 8% of your earnings might not be enough

Research from Retirement Living Standards shows that a single-person household currently needs a yearly income of £13,400 to achieve a minimum standard of living. This jumps to £31,700 to lead a moderate lifestyle, and as much as £43,900 to enjoy a comfortable one.

Saving 8% of the average UK salary each year is unlikely to generate an income that meets the moderate lifestyle threshold, even when it’s combined with the full State Pension.

Time away from work, periods of unemployment and fluctuations in earnings are all possible within the span of a typical career, meaning further savings when you’re earning more may be needed.

What are some common misconceptions about auto-enrolment?

Misconception #1: 8% is a target

When auto-enrolment was introduced, the government intended people to view saving 8% of their earnings as a baseline rather than a target. But many do not.

Modelling has shown that over half of people with a defined contribution pension retiring between 2025 and 2060 will not have saved enough to meet their likely retirement income needs.

Our research shows that around half of defined contribution pension savers assume auto-enrolment is enough, and only 31% have ever increased their contributions above the minimum level.

Reframing the 8% figure as a starting point may help you to make more informed decisions about the amount you set aside for retirement.

Misconception #2: It doesn’t matter when you start saving

65% of the value of most pensions comes from investment growth. The longer you can invest your money in your workplace pension scheme the better, as it’s more likely to generate a return over time.

However only 25% of people think investment growth is the biggest contributor to their pension. Young people stand to gain the most from investing more earlier, but they are also more likely to assume that the default 8% is enough for retirement. This reflects a wider confidence gap, where younger savers often underestimate how much they need to save and feel less certain about making decisions about their pension.

It’s important to note that personal or workplace pension plans are investments and their value can go down as well as up – so they could be worth less than was paid in.
 

I’m concerned I’m not saving enough – what can I do?

If you’re worried that you’re not putting enough aside to save for retirement, don’t worry. There are several things you can do.

First, remember that you’re not limited to saving the minimum amount into your workplace pension. You can opt to increase your savings if that’s the right decision for you; even small increases can make a difference over the long term.

Then assess whether the amount you’re currently saving is enough for the life you want in retirement. You can check how much money you might be on track for by using our pension calculator.

Next, take a look at the pension options your workplace provides. Some employers will pay more into your pension when you increase your own contributions, which could help to increase your pension amount in retirement.

Don’t forget that you can also use savings such as ISAs (Individual Savings Accounts) to supplement the money you’ll get from any pension pots you have when you come to retirement age. Remember, some types of ISAs are investments and their value could go down as well as up, and could be worth less than was paid in.

Taking an active role in your pension planning can help you build on the foundation that auto-enrolment provides and put you in more control of your retirement.

It’s a good idea to regularly review any personal or workplace pension plans you have to see if they’re on track to meet your goals. You can then decide whether you want to make any changes.

A simple next step is to check your current savings and see what they might be worth in the future. If you’re a Standard Life customer, you can review your plans online. You can learn more about our online services on our website or check our support page for FAQs and ways to get in touch.

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The information here is based on our understanding in April 2026 and shouldn’t be taken as financial advice.

Standard Life accepts no responsibility for information on external websites. These are provided for general information.

A pension plan is an investment. Its value can go down as well as up and could be worth less than was paid in.