18 December 2025
If you are covering the Automatic Enrolment Earnings Trigger and Qualifying Earnings Band Review 2026/27, please see the following comment from Jon Greer, head of retirement policy at Quilter:
“Automatic enrolment has been one of the most successful public policy interventions of the past two decades, and the decision to prioritise stability while the revived Pensions Commission undertakes its work is understandable. Employers and workers alike value certainty, particularly at a time when many households are still under financial pressure.
“From an employer perspective, it would have been extremely difficult to introduce meaningful changes to automatic enrolment at this stage. Businesses are already facing higher costs following the increase in employer National Insurance contributions announced in Labour’s first Budget, and the prospect of further changes to the National Insurance treatment of salary sacrifice adds to that burden. Against this backdrop, asking employers to absorb higher pension costs as well would have been challenging.
“However, freezing the thresholds should not be mistaken for standing still. As wages rise and the lower earnings limit of the qualifying earnings band remains at £6,240 , more of peoples earnings will be brought into automatic enrolment and a greater proportion of earnings will be subject to pension contributions. In effect, this creates a form of pensions fiscal drag, with contribution levels increasing arguably by default rather than through an explicit policy decision.
“For workers, particularly those on lower incomes, this can feel like a squeeze on take-home pay, even though saving for retirement is clearly in their long-term interests. It reinforces the need for careful sequencing of reform so that improving long-term adequacy does not inadvertently worsen short-term affordability.
“The government is right to recognise that millions remain at risk of under-saving, and the return of the Pensions Commission is a welcome opportunity to look again at how automatic enrolment can be modernised. While the policy has been a clear success in boosting participation, it needs a clear pathway to evolve if it is to better support people in reaching their long-term retirement goals.
“Stability today is sensible, but setting out a clear roadmap for how automatic enrolment will deliver better outcomes tomorrow will be crucial to maintaining confidence in the system.”
