Employees working just two days a week on the new National Living Wage will now qualify for auto-enrolment pensions, according to Standard Life.
According to the analysis, from April 2026, the National Living Wage for those aged 21 and over will rise to £12.71 per hour, while the annual auto-enrolment threshold remains at £10,000. This means employees working 15 hours per week, around two days, will meet the earnings trigger, ten hours fewer than when the policy was introduced in 2012.
Standard Life’s analysis highlights that even part-time work can generate meaningful retirement savings. An employee earning the new minimum wage and working 15 hours per week could add £818 to a pension pot in one year, while full-time work (37.5 hours) could contribute £2,030. Over a working lifetime, a 22-year-old full-time worker could accumulate up to £208,000, assuming 3.5 per cent earnings growth, 5 per cent investment growth less charges, and 2 per cent inflation.
However, saving for retirement remains a challenge for many low-income households, with only one in four low-income private sector workers currently contributing to a pension. Furthermore, just 9 per cent consider pension saving a financial priority over the next year, compared with 28 per cent of high-income households.
The recently reinstated Pension Commission is expected to explore reforms to improve retirement saving for low earners, including lowering the age threshold and removing minimum earnings limits.
Standard Life Centre for the Future of Retirement director Catherine Foot says: “A rising minimum wage not only boosts pension savings through higher contributions on increased salaries, but it also makes auto-enrolment more accessible. With the new National Living Wage from April, working just 15 hours a week will be enough to meet the £10,000 annual earnings threshold, enabling more people to qualify for workplace pensions and start building their retirement savings.
“Although cost-of-living pressures and immediate financial concerns remain a priority for low-income and part-time workers, even a small amount saved to a workplace pension, which is boosted by valuable employer contributions, can make a meaningful difference to future retirement incomes.
“The Pension Commission will need to strike the right balance between addressing under saving among the most vulnerable groups with the pressures facing employers with the rising cost of employment.”
