Millions of workers could see their take-home pay fall in six weeks’ time when the minimum contribution amount through auto-enrolment increases.

Since 2012, 10 million eligible workers have been automatically signed up to workplace pension via automatic enrolment and, from April, their minimum contribution amount will rise from 3 per cent of their salary to 5 per cent.

Hargreaves Lansdown conducted an analysis for the BBC, and suggested that the annual take-home pay of someone earning £15,000 will typically be £49 lower, if they pay contributions on their entire salary. According to the calculations, someone earning £30,000 will take home £253 less per year.

However, the hit to net pay could have been larger, but a tax cut for most earners will ease the blow of higher contributions, with the personal allowance due to increase to £12,500 from April.

The government will closely monitor what happens when the amount increases, as some in the industry are concerned that lower take-home pay could lead people to opt out of saving into their pension.

In April 2018, when the first increase to contribution rates was implemented, the rate of people stopping saving into a workplace pension was just 0.7 per cent in the first three months, compared with 0.6 per cent for the previous four years.

Commenting, Aegon head of pensions Kate Smith said: “While the analysis shows how much take-home pay will reduce by as a result of the increase in employee auto-enrolment minimum contributions, it’s at least as important to highlight the increase this means for contributions going into your pension, not only from the employee, but also from the employer and government.

“Pensions are part of people’s pay packet. For someone earning £15k, the reduction in take home pay results in an extra £261 contributed to their pension each year a significant amount of which comes from the employer. We hope that people will take a long term view on their pension contributions as opting out is likely to make saving for retirement later much harder by reducing the length of time pension contributions can benefit from investment returns. Putting off pension saving could turn out to be harmful in the long term. ”

The government and professionals within the pensions industry regard auto-enrolment as a huge success, and the government wants the first £1 of earnings to count towards a pension, and plans to introduce this change in the mid-2020s, opposed to the current threshold, a minimum income of £6,032.

Employers’ minimum contributions are also due to increase in April from 2 per cent to 3 per cent of a workers’ salary.

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