What the frozen pension auto-enrolment thresholds mean for UK workers in 2025

The UK’s pension auto-enrolment system requires employers to automatically enrol eligible employees into a workplace pension scheme. For the 2025/26 tax year, the earnings trigger remains at £10,000 per year, unchanged since 2014/15. :contentReference[oaicite:0]{index=0}

What are the key thresholds?

According to guidance from the The Pensions Regulator, the qualifying earnings band for contribution calculation in 2025/26 is from £6,240 to £50,270. :contentReference[oaicite:2]{index=2} This means that even if a worker earns much more than £50,270, the minimum employer contribution only applies to the earnings within the band.

Why the thresholds matter

• Employees earning £10,000 or more are automatically enrolled into the pension scheme (if aged 22 up to State Pension age). :contentReference[oaicite:3]{index=3}
• The “qualifying earnings” band determines how much of an employee’s earnings are used for contribution calculations.
• Because the upper level (£50,270) has not risen in real terms for several years, higher-earners are effectively paying the same minimum contribution as lower-middle earners. :contentReference[oaicite:4]{index=4}

Consequences for workers and employers

For workers:

• Those earning just above £10,000 become eligible but may still be under-contributing relative to their income growth.
• Workers earning significantly more than £50,270 receive no automatic increase in minimum employer-contributed pension amounts unless the employer chooses higher rates.
• Over time, this could lead to lower retirement savings for higher-earning workers if they rely solely on the automatic minimum. :contentReference[oaicite:5]{index=5}

For employers:

• The decision to maintain thresholds offers predictability and stability in employer costs for 2025/26. :contentReference[oaicite:6]{index=6}
• However, some employers may need to consider increasing contribution rates voluntarily to support employee retention and pension adequacy.

What’s the broader context?

• The thresholds have been frozen despite wage growth over many years, meaning more earnings effectively fall outside the pension contribution calculations.
• Analysts warn this “freezing” may create a pension savings gap for many workers, particularly higher earners, over their working lifetime. :contentReference[oaicite:7]{index=7}
• The government’s review decided not to increase the trigger or band for 2025/26, citing the need to balance pension participation with business cost pressures. :contentReference[oaicite:8]{index=8}

What can workers and employers do?

• Workers should check whether they are enrolled, review their pension contribution rate, and consider topping up if they are high earners or nearing retirement.
• Employers can evaluate whether their minimum contribution formula continues to serve their workforce, especially in relation to retention and staff development goals.
• Both should monitor any upcoming policy changes—thresholds may remain frozen further but voluntary increases in employer contribution rates are becoming more common.

The bottom line

While pension auto-enrolment has been successful in increasing retirement savings participation, the frozen earnings trigger and contribution band mean that many higher-earning employees may not see their automatic pension contributions keep pace with income growth. For long-term retirement security, both workers and employers may need to act beyond the minimum requirements.

References:

• Review of the automatic enrolment earnings trigger and qualifying earnings band for 2025/26 – DWP :contentReference[oaicite:9]{index=9}
• Earnings thresholds – The Pensions Regulator :contentReference[oaicite:10]{index=10}
• Automatic enrolment thresholds frozen at 2024-25 levels – FTAdviser :contentReference[oaicite:11]{index=11}