Increasing minimum automatic enrolment (AE) contributions is the "best route" to boosting pension savings and tackling the UK's retirement adequacy crisis, Pensions Commissioner, Baroness Jeannie Drake, has argued.

Speaking at the Pensions UK Annual Conference 2026, Drake warned that voluntary contributions and saver engagement alone would not be enough to address widespread under-saving, stressing that raising minimum contributions would be necessary to secure adequate retirement incomes for future generations.

"The efficient way to get more saving, and in my view, the best route to delivering this, is through increasing automatic enrolment minimum contribution rates," she stated.

Drake acknowledged that such changes would involve difficult trade-offs for employers, employees and the government, but argued that failing to act could have more significant consequences.

"This won't be without difficulty, but it will be necessary," she said.

Drake explained that higher contributions would require employers to adjust their remuneration budgets, could reduce employees' take-home pay, and would affect government spending on pensions tax relief.

However, she questioned that "if employer contributions do not go up, how will we prevent millions from failing to save towards adequate retirement, and avoid increasing reliance on means-tested benefits, old age, by millions of people, in all the tax implications that brings?"

Drake highlighted the scale of the UK's pension adequacy challenge, pointing to the Commission's interim findings that 15 million people are currently under-saving for retirement, with this figure potentially rising to 19 million without intervention.

She also noted that additional pension saving above AE minimum levels remained limited, with voluntary contributions often driven by employer contributions rather than individuals independently choosing to save more.

Indeed, despite tax incentives and efforts to improve engagement, Drake said evidence suggested the average worker was unlikely to respond to encouragement to increase contributions voluntarily.

She argued that AE's success demonstrated the effectiveness of inertia-based defaults and provided a foundation for further reforms.

However, Drake stressed that increasing contribution rates would need to form part of a wider package of reforms, rather than being considered in isolation.

She confirmed that the commission was examining how the state pension, workplace pension saving and voluntary contributions interact, alongside the role of investment returns and how savers access their pension wealth in retirement.

In particular, she cautioned against relying on stronger investment performance or economic growth alone to resolve the adequacy challenge.

Turning to the commission's forthcoming recommendations, Drake confirmed that affordability and implementation would be central considerations, acknowledging concerns about the impact of higher contributions on employers and workers.

She also highlighted the importance of tackling inequalities in pension saving, particularly among women, lower earners, ethnic minorities and the self-employed.

With this in mind, Drake revealed that the commission was exploring a hybrid approach to measuring retirement adequacy, combining replacement rates with minimum living standards.

She also stressed that pension reform would require sustained political commitment, warning that changes would need to endure across multiple governments to deliver meaningful improvements.

Reflecting on the original Pensions Commission's work two decades ago, Drake noted that reforms initially considered politically difficult had ultimately secured cross-party support and transformed workplace pension saving.

"In 20 years' time, I don't want the members of another commission standing in front of a Pensions UK conference reminding us of a lost opportunity," she concluded.

"We have a once-in-a-generation opportunity to finish the job that Lord Turner started, and hopefully it is well taken."

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