Workers across the UK and Ireland are being encouraged to increase their pension contributions by at least two per cent amid growing concerns over inadequate retirement savings. While no official policy targets specific birth years, financial experts and government initiatives have increasingly emphasized the need for greater personal pension contributions—particularly for workers in their 30s to 50s who may still have time to close their pension gap.

This renewed urgency follows key developments in pension reform and policy recommendations, including calls to raise the minimum contributions for auto-enrolment schemes and Ireland’s forthcoming “My Future Fund” auto-enrolment rollout.

UK: A Call for Higher Auto-Enrolment Contributions

In the United Kingdom, the standard auto-enrolment contribution rate remains at a minimum of 8% of pensionable earnings—5% from employees and 3% from employers. However, financial services leaders have publicly urged the government to act now and raise this threshold gradually to ensure workers are not left financially vulnerable during retirement.

Experts have suggested that the minimum contribution should increase to around 12-15% over time to reflect growing life expectancies and inflationary pressures on post-retirement income.

Without such reforms, many middle-aged workers, particularly those born between the early 1970s and late 1980s, may find their current contributions insufficient to sustain their lifestyle post-retirement.

Ireland: New Auto-Enrolment Scheme Launching in 2025

Meanwhile, Ireland is taking a bold step by launching its first auto-enrolment pension scheme, set to begin in September 2025. The “My Future Fund” will automatically enrol workers aged between 23 and 65 earning more than €20,000 per year. The scheme is designed to address the pension shortfall faced by approximately 800,000 private-sector workers without supplementary pension coverage.

Under this scheme, contributions will start at 1.5% of gross salary, gradually rising to 6% over ten years. Employers will match the employee contributions, and the state will add a further top-up, effectively turning every €3 of employee contributions into €7 of total pension savings.

The Department of Social Protection Ireland provides further information about eligibility and contribution schedules.

Why a 2% Increase Matters

Although the idea of increasing pension contributions may feel daunting, a two per cent boost—whether applied now or phased in—can make a significant difference to long-term savings.

For example, a worker in their 40s earning £35,000 annually who increases their pension contribution from 5% to 7% could generate thousands more in retirement income over a 20-year period. Compounded investment returns amplify even small increases, making early action particularly valuable.

Many workers born between 1970 and 1990 are now in their peak earning years. This makes the window for boosting pension savings crucial, especially for those who may not have started saving early in their careers or who experienced job gaps due to caregiving or self-employment.

The MoneyHelper Pension Calculator can help individuals estimate the impact of increasing contributions on their retirement fund.

How to Increase Your Contributions

For workers looking to increase their pension contributions, the process can be relatively straightforward:

1. Contact Your Employer: Speak with HR or payroll to arrange a higher monthly deduction from your salary.
2. Use Salary Sacrifice: This tax-efficient method allows you to exchange part of your salary for a pension contribution, potentially reducing your taxable income.
3. Set Annual Goals: Consider increasing your contributions by 1–2% each year to gradually build a stronger pension pot.
4. Review and Reassess: Regularly check your pension growth and adjust your strategy based on market conditions or salary changes.

Additionally, you can explore options through a personal pension scheme or Self-Invested Personal Pension (SIPP) for greater control.

Final Thoughts

Whether you’re in your 30s, 40s, or early 50s, increasing pension contributions—even slightly—can help avoid future financial strain. With government schemes evolving and experts sounding the alarm, now is the time for proactive steps to secure a comfortable retirement.

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