Recommendation 5

There is a consensus that many people need to increase their pension contributions if they are to have an adequate income in retirement. Many told us that minimum contribution rates needed to increase above 8% if this was to happen. We welcome the former Pensions Minister’s aspiration to work towards a 12% minimum contribution rate, as in Australia. There are good arguments for starting with an increase in employer contributions to 5%, level with employees. And any move to increase contributions should aim to increase pension saving for the right people at the right time. We welcome the fact that DWP is doing research to understand the impact on low earners.