Auto-enrolment has helped more than 10 million employees save in a workplace pension, although an 8% contribution is unlikely to provide the level of income in retirement that most people aspire to, according to new analysis by Aegon.

Since the introduction of auto-enrolment in 2012, total minimum contribution rates have risen from 2% to 8% of qualifying earnings, with the last two years seeing rises in April to 5% and then 8%.

April 2020, however, will see no further rise and the Government has no confirmed plans for further compulsory increases any time soon.

Aegon has called on employees, matched by their employers, to consider a further voluntarily increase to their pension contributions to improve the chance of saving enough for the retirement they want.

Aegon pensions director, Steven Cameron, commented: “It’s encouraging (that) very few employees have ‘opted out’ when their personal contributions increased from 1% of qualifying earnings to 3% in 2018, and 5% in 2019. Workplace pension savings are particularly attractive because of the tax relief on personal contributions but also a very valuable employer contribution.

“While contributing 5% each month may seem like a significant amount of money, it’s widely accepted that for most individuals just saving this amount will leave them with a significant shortfall if they want to maintain their lifestyle in retirement.

“With no statutory rise this April, we are encouraging employees to consider voluntarily stepping up their contributions and for employers to offer to match this. Employers can use this to demonstrate they are prepared to go the extra mile when it comes to helping with employee pensions, rather than simply doing the minimum.”

Aegon’s analysis revealed that an employee aged 25 on average earnings could boost their pension pot by £43,900 at state pension age, if they increased their contribution by just 1% above minimum contribution rates, and if this was matched by an additional 1% by their employer – equating to 10% total contribution.

The pension and investment provider made its calculations assuming 3% wage growth as well as investment growth of 4.25% after charges, and added that for this same employee, an extra 2% contribution on top of minimum contribution rates, matched by a further 2% from their employer – to make 12% total contribution – could boost their pension pot at state pension age by £87,700.

“The earlier you increase your contributions, the longer they have to grow, but it’s not just those in their 20s who can benefit,” Cameron added. “These extra funds could make the difference between just scraping by and being able to afford those extras than can make a big difference to quality of life.”

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