Higher auto-enrolment contributions, pension adequacy and economic outcomes
A report for Royal London
Over a decade on from the introduction of automatic enrolment, many employees with defined contribution (DC) pensions remain at risk of retiring with insufficient savings. In this study, Oxford Economics and Royal London assess how reforms to minimum default contributions affect pension adequacy and the wider UK economy.
The analysis shows how both income‑linked and uniform increases in minimum default contributions improve pension savings and affect short‑term liquidity pressures.
The modelling also shows broader economic benefits. Additional pension assets, resulting from higher contributions, increase long‑term investment in the UK. The extent of this benefit is boosted by voluntary commitments under the Mansion House Accord to allocate more pension assets to UK private markets. Across the scenarios assessed this investment is estimated to increase annual GDP by between £0.7 billion and £6.2 billion in 2060.
The experts behind the research
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Ben SkeltonLead Economist
Ben joined Oxford Economics in 2013 and has extensive experience in model building and economic analysis. Recently, he has led analytical work for clients including Hargreaves Lansdown and the Skipton Group.
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Alex StewartAssociate Director
Alex Stewart joined Oxford Economics in May 2023 having spent the previous seven years at the HM Treasury. At Oxford Economics, Alex’s work has focused on assessing the economic impacts of policy reform and analysis of trends in household finances.
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