The pension law that passed in 2023 and still isn't switched on
- The Act got Royal Assent on 18 September 2023. It is two sections long and does nothing until the Secretary of State makes regulations. None have been made.
- Switched on, it would auto-enrol 18 to 21 year olds and calculate contributions from £1 instead of from £6,240. That is £499.20 a year more per employee on the statutory minimum.
- Ministers said "mid-2020s" from 2017 to May 2024. Since the election the line is "if and when", and the question has been handed to a Pensions Commission that reports in 2027.
- My guess is nothing changes before April 2029 at the earliest, and the frozen £6,240 lower limit quietly does part of the job in the meantime.
On 18 September 2023 the Pensions (Extension of Automatic Enrolment) Act became law. It lets the government drop the auto-enrolment age from 22 to 18 and scrap the £6,240 lower limit, so pension contributions come off the first pound of pay. Both were promised for “the mid-2020s”. It’s now September 2026 and not one regulation under the Act has been made. Nothing in it is in force.
What the Act actually does#
On its own, nothing. It’s two sections long. Section 1 gives the Secretary of State three powers: lower the auto-enrolment age by regulations, reduce or repeal the £6,240 lower limit, and if they repeal it, also repeal the category of “workers without qualifying earnings”. Section 2 says when it starts:
Section 1 comes into force on such day or days as the Secretary of State may by regulations made by statutory instrument appoint.
So before any payslip changes there’s a commencement order, then a consultation, then a report to Parliament, then regulations both Houses vote on. Here’s how far that’s got.
| Step | Status, September 2026 |
|---|---|
| Consultation on implementation | Promised for autumn 2023. Never published. |
| Commencement regulations | None made. |
| Report to Parliament | Nothing to report on. |
| Regulations setting the new age and lower limit | None laid. |
The policy itself is older. The DWP’s 2017 auto-enrolment review recommended both changes, said they’d bring in about 900,000 more young people and £3.8 billion a year of extra saving, and set the “mid-2020s” ambition. The Act is just the legal plumbing for that, six years later.
What it would do to a payslip#
Today you’re auto-enrolled if you’re 22 or over, under state pension age, and earn over £10,000. Contributions are 8% of pay between £6,240 and £50,270, so the first £6,240 is pensioned at nothing. Under the Act the age drops to 18 and the £6,240 goes. The £10,000 trigger stays.
Everyone on the statutory minimum gets an extra £499.20 a year into their pension, £187.20 of it from the employer. The lowest earners over the trigger get hit hardest in proportion: someone on £10,000 goes from about £300 a year to about £800. A 20 year old on £24,000 gets nothing today unless they opt in. And if the employer already pensions all pay from £1, which a lot of bigger ones do, only the age change lands.
Three years of “soon”#
| When | Who | What they said |
|---|---|---|
| Mar 2023 | Laura Trott, pensions minister | Consultation “in the autumn”. Timing “has previously been the mid-2020s, and that is what we will continue to say.” |
| Oct 2023 | Laura Trott, written answer | Consult “at the earliest opportunity and report to Parliament before using the powers in the Act”. |
| May 2024 | Paul Maynard, written answer | Still “implementing these measures in the mid-2020s”. |
| Nov 2024 | Emma Reynolds, new government | “We will consider if and when to make changes to AE, balancing the need for improved pension outcomes with the effects on businesses.” |
| Sep 2025 | Torsten Bell, asked directly if the Act will be implemented | No date. “The job is only half finished.” Points to the revived Pensions Commission. |
| Dec 2025 | Torsten Bell, written statement | Thresholds frozen for 2026/27 “to avoid prejudicing the work of the Pensions Commission”. |
| May 2026 | Pensions Commission interim report | Will “consider how the eligibility criteria, income thresholds, and minimum contribution rates … will need to be adjusted”. Final report 2027. |
The Commission’s report doesn’t mention the Act. Neither does the Pension Schemes Act 2026. The Pensions Regulator’s 2024 to 2027 plan said it would prepare for the changes, and the 2025 update dropped that line. As far as I can tell everyone involved has stopped mentioning it.
Why I think it’s stuck#
This is my reading, not anything a minister has said. The DWP’s impact assessment put the first full year at around £2 billion: £0.8 billion from employers, £0.9 billion from employees, £0.2 billion in tax relief. Since April 2025 employers pay 15% National Insurance from £5,000 of pay instead of 13.8% from £9,100. Adding £0.8 billion of pension cost on the same low paid jobs was never going to happen in 2025 or 2026. And the employees who’d see the biggest cut in take-home pay are the lowest earners the policy is meant to help. So a decided policy has been handed back to a review body, with the Act’s powers sitting there in case the review agrees.
Things I worked out myself#
Per employee. £6,240 × 8% = £499.20 a year for anyone on the statutory band earning over £6,240. Employer £187.20, employee £249.60 after basic-rate relief, £62.40 of relief. Monthly that’s £41.60 into the pension, £20.80 off the payslip.
How many people the £2 billion covers. £2 billion ÷ £499.20 is about 4 million, out of 22.6 million eligible employees saving. If every enrolled employee were on the bare minimum the figure would be over £11 billion. So the DWP number only works if most employers already pension more than the band, which matches what I see.
The frozen limit is doing the job slowly. The £6,240 hasn’t moved since April 2020. A full-time National Living Wage job was about £17,000 then and is about £24,800 now, so the unpensioned slice went from 37% of pay to 25%, and statutory contributions from £861 to £1,484 a year. Every year of the freeze does a bit more of what the Act was for.
For a 50-person employer on the statutory minimum with four 18 to 21 year olds not yet enrolled, it’s about £12,000 a year of extra employer contributions. Not huge, but permanent, and in the same breath as the NI rise.
What would change in payroll software#
Less than you’d think. The age test moves from 22 to 18, re-enrolment ages with it. The band calculation’s lower bound becomes zero, and most engines already do “pensionable pay from £1” for certified schemes. If section 9 is repealed, “entitled worker” stops being a category, so anyone under the trigger who opts in gets an employer contribution. Then the letters and the assessment output. None of it is a big build. The hard part was always the money, not the code.
The predictions#
| # | Prediction | Confidence |
|---|---|---|
| 1 | No commencement regulations before the Pensions Commission’s final report in 2027 | High |
| 2 | The £6,240 lower limit and £10,000 trigger stay frozen for 2027/28 as well | High |
| 3 | The age change to 18 comes first and on its own. It’s cheap and nobody argues against it. | Medium |
| 4 | Earliest go-live for either change is April 2029: report in 2027, consultation, affirmative regulations, then a year’s notice for employers | Medium-high |
| 5 | The Commission recommends a bigger package and the 2023 powers get used as part of it, or replaced by new primary legislation | Medium |
Sources#
Legislation:
- Pensions (Extension of Automatic Enrolment) Act 2023 (c. 44) and its explanatory notes
- Pensions Act 2008, section 13 (qualifying earnings)
- Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2014 - the £10,000 trigger
- Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2020 - the £6,240 lower limit
- Pension Schemes Act 2026 (c. 22) - doesn’t touch auto-enrolment thresholds
DWP and Parliament:
- Automatic enrolment review 2017: Maintaining the momentum
- Bill page with impact assessment and delegated powers memorandum; the impact assessment figures are reproduced in the Lords explanatory notes (HL Bill 128)
- Commons Library briefing on the bill, CBP-9759 and Lords Library briefing LLN-2023-0040
- Commons third reading, 24 March 2023 (Hansard)
- Lords second reading, 14 July 2023 (Hansard) and Lords third reading, 18 September 2023
- Written answers: Laura Trott, 26 October 2023; Paul Maynard, 9 May 2024; Emma Reynolds, 28 November 2024; Torsten Bell, 8 September 2025
- Written statement HCWS1206, 18 December 2025: 2026/27 thresholds frozen and the 2026/27 threshold review
- Pensions Commission terms of reference, July 2025 and Finishing the job: launching the Pensions Commission - the 21% figure
- Pensions Commission interim report, May 2026: Pensions 2050
- Workplace pension participation and savings trends 2009 to 2025 - the 22.6 million figure
The Pensions Regulator:
- Earnings thresholds 2026/27
- Detailed guidance 3: assessing the workforce and guidance 4: minimum contributions
- Corporate plan 2024 to 2027 and the year 2 update
This describes the law and published statements as at September 2026, plus predictions that are clearly marked as mine. It isn’t pensions or tax advice.
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