Auto-enrolment extension to 18-year-olds confirmed for 2027
The age at which employees must be automatically enrolled into a workplace pension is set to drop from 22 to 18, with contributions calculated from the first pound earned.
By Money Guide editorial team
Published:
The government has confirmed an implementation date in 2027 for the long-promised expansion of pensions auto-enrolment. Two changes will take effect together: the qualifying age drops from 22 to 18, and the lower earnings limit for contribution calculation is removed, meaning contributions will be calculated on every pound earned up to the upper limit.
For a 22-year-old earning £25,000, the change will increase contributions by around £180 a year (employee share). For an 18–21-year-old previously not enrolled, it will introduce them to workplace pension saving from their first pay cheque.
Employers will need to update payroll systems and re-enrol staff in the affected age bracket who had previously opted out. The minimum overall contribution rate of 8% (5% employee, 3% employer) is unchanged.
The reform is expected to add around £2 billion a year to UK pension contributions once fully bedded in, with most of the gain accruing to younger workers and those on lower pay.