# Workplace pension contributions: UK benchmark 2026

> In 2026, 81.4% of UK employers set the default pension contribution for auto-enrolled joiners at the statutory minimum only (n = 237).

Source: https://lumihr.co.uk/research/workplace-pensions-2026
Author: David Whitfield (https://lumihr.co.uk/about/david-whitfield)
Answers: What default pension contribution rate do UK employers set for auto-enrolled joiners?
Data: lumi reward benchmark · national · collection window 2026 H1
Review by: when the next collection window closes

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*lumi research · Collection window 2026 H1 · By David Whitfield*

**In the lumi reward benchmark, 81.4% of UK organisations set the default employee contribution rate for auto-enrolled joiners at the statutory minimum only (n = 237, 2026 H1), and 19.7% say their scheme meets the PLSA quality-mark threshold (12% total, 6% employer; n = 264).**

> **Key findings**
> - Defined contribution (DC) is the common scheme type for the main population, at 89.2% of organisations (n = 269). Defined benefit (DB) is rare at 9.3%, and hybrid schemes are rare at 1.5%.
> - None, meaning no pension contribution matching, is the common answer, at 51.7% (n = 269). 48.2% offer matching at some level (19.3% + 14.1% + 10.0% + 4.8%).
> - Qualifying earnings (band) is the common basis for calculating contributions, at 45.3% (n = 265). Basic pay is an alternative, at 38.1%.
> - 19.7% say their scheme meets the PLSA quality-mark threshold of 12% total and 6% employer (n = 264).
> - 81.4% set the default employee contribution rate for auto-enrolled joiners at the statutory minimum only (n = 237, "Not applicable" excluded).
> - 35.1% operate auto-escalation of pension contributions (19.8% by default + 15.3% on an opt-in basis; n = 268).
> - Employer pension contributions cost a median of 7% of total reward spend, with a 25th percentile of 5.5% and a 75th percentile of 9.5% (n = 268).

## About the data

This paper reports how UK employers answered lumi's questions on workplace pension design. The lumi reward benchmark covers 269 UK organisations across 14 sectors and five size bands. Data was collected in the 2026 H1 collection window. Each figure gives its base (n): the number of organisations that answered that question. Percentages are rounded to one decimal place, so a distribution can add up to 100.1%. Figures here are national. Sector and size comparisons are available to lumi members. See [how lumi works](/methodology) for the method.

## The legal context

Automatic enrolment requires minimum total contributions of 8% of qualifying earnings, at least 3% of which must come from the employer. That minimum applies to automatic enrolment into defined contribution schemes; this paper also reports defined benefit and hybrid schemes, which are funded on a different basis. The questions below ask about design choices made above or alongside it. The PLSA quality-mark threshold referred to in one question (12% total, 6% employer) is a separate reference point, not part of the statutory minimum.

## What pension scheme do UK employers offer, and on what earnings basis?

*What type of pension scheme is offered to the main population?* (n = 269)

DC is the common answer, at 89.2% (240 organisations). DB is rare, at 9.3% (25). Hybrid schemes are rare, at 1.5% (4). DB or hybrid provision for the main population is reported by 10.8% (9.3% + 1.5%).

Scheme type sets what the rest of the design means. In a DC scheme the employer's cost is the contribution it pays, and the member carries the investment risk. In a DB scheme the employer promises an income and carries the funding risk. Matching, default rates, auto-escalation and the default fund are mainly DC design levers. The question covers only the main population, not closed schemes or schemes for smaller groups.

*On what earnings basis are pension contributions calculated (qualifying earnings vs full/basic pay)?* (n = 265)

Qualifying earnings (band) is the common answer, at 45.3% (120 organisations). Basic pay is an alternative, at 38.1% (101). Total or full pay is rare, at 16.6% (44). Calculation on basic or total pay is reported by 54.7% (38.1% + 16.6%).

The earnings basis matters as much as the headline rate. The statutory minimum is defined on qualifying earnings, which is a band, so pay outside the band attracts no contribution. The slice excluded at the bottom is a larger share of a lower earner's pay. Basic pay brings all of salary into scope but leaves out variable pay. Total pay can bring overtime, allowances and bonus into scope. Two schemes quoting the same percentage can therefore produce different contributions for the same employee.

## How many UK employers match pension contributions, and what does pension cost?

*Do you offer pension contribution matching, and up to what level?* (n = 269)

| Answer | % of organisations | Organisations | Prevalence |
|---|---|---|---|
| None | 51.7% | 139 | common |
| Up to 3% | 14.1% | 38 | rare |
| Over 3% to 5% | 19.3% | 52 | rare |
| Over 5% to 8% | 10.0% | 27 | rare |
| Over 8% | 4.8% | 13 | rare |

None is the common answer, at 51.7% (139 organisations): these organisations offer no contribution matching. 48.2% offer matching at some level (14.1% + 19.3% + 10.0% + 4.8%). Each band is rare on its own. Over 3% to 5% is the largest of the four bands, at 19.3%. Matching above 5% is reported by 14.8% (10.0% + 4.8%).

Matching ties the employer's contribution to the employee's own saving. It directs employer money towards those who choose to save more and costs less for members who stay at the minimum. The band sets the ceiling on employer cost per member; take-up sets the actual cost. The question asks about matching, not a fixed employer rate, so an organisation answering "None" may still pay a high fixed employer contribution.

*Does the scheme meet the PLSA quality-mark threshold (12% total / 6% employer)?* (n = 264)

No is the common answer, at 80.3% (212 organisations). Yes is rare, at 19.7% (52).

A scheme can sit above the statutory floor of 8% total, at least 3% from the employer, and still answer "No". The question does not show where schemes answering "No" sit between the floor and the threshold.

*What do employer pension contributions cost, as a % of your total reward spend?* (n = 268)

The median is 7% of total reward spend. The 25th percentile is 5.5% and the 75th percentile is 9.5%. Answers range from 1.5% to 18%.

This measures pension as a share of the reward budget, not as a rate of pay, so it reflects the rest of the reward mix as well as contribution design. An employer with a large bonus pool will show a lower pension share for the same contribution rate than one whose reward spend is mostly salary and pension.

## What pension defaults do UK employers set for joiners, escalation and the fund?

*What is the default employee contribution rate for auto-enrolled joiners (above statutory minimum)?* (n = 237; 7 answered "Not applicable" and are excluded from the base)

| Answer | % of organisations | Organisations | Prevalence |
|---|---|---|---|
| Statutory minimum only | 81.4% | 193 | common |
| 1-2pp above | 8.9% | 21 | rare |
| 3pp+ above | 5.5% | 13 | rare |
| Opt-up default (auto-escalation) | 4.2% | 10 | rare |

Statutory minimum only is the common answer, at 81.4%. A default set one or more percentage points above the minimum is reported by 14.4% (8.9% + 5.5%). An opt-up default using auto-escalation is rare, at 4.2%.

A default decides the rate for every joiner who makes no active choice. A statutory-minimum default keeps the joiner's deduction low and take-home pay correspondingly higher. A higher default raises saving for everyone who accepts it and lowers take-home pay from the first payslip, which some joiners may weigh against staying in. Where contributions are linked through matching, a higher default also raises employer cost.

*Do you operate auto-escalation of pension contributions (e.g. save-more-tomorrow)?* (n = 268)

No is the common answer, at 64.9% (174 organisations). Yes, by default, is rare, at 19.8% (53). Yes, on an opt-in basis, is rare, at 15.3% (41). Auto-escalation in either form is reported by 35.1% (19.8% + 15.3%). This question and the joiner-rate question have different bases and measure different things, so their figures are not directly comparable.

Auto-escalation raises contributions in steps and can be timed to pay awards so that take-home pay does not fall. As a default, it works through inertia: members escalate unless they act. As an opt-in, it depends on the employee choosing it. With contribution matching, escalation can raise employer cost as well as employee saving.

*Does your default pension fund have a published ESG or net-zero commitment?* (n = 204; 27 answered "Not applicable" and are excluded from the base)

Standard default is the common answer, at 52.0% (106 organisations). ESG-tilted is an alternative, at 32.4% (66). Yes, net-zero aligned is rare, at 15.7% (32). An ESG-tilted or net-zero aligned default is reported by 48.1% (32.4% + 15.7%).

The default fund holds the savings of every member who makes no investment choice. An ESG-tilted or net-zero aligned default takes a position on environmental, social and governance risk for those members. A standard default avoids taking that position for them. The question asks about a published commitment only; it does not cover fund charges or investment returns.

## Do UK employers offer pension flexibility and retirement planning support?

*Do you offer pension contribution flexibility (e.g. reduce to statutory during cost-of-living pressure with easy restore)?* (n = 267)

No is the common answer, at 77.5% (207 organisations). Formal flexibility is rare, at 12.4% (33). Informal flexibility is rare, at 10.1% (27). Flexibility of either kind is reported by 22.5% (12.4% + 10.1%).

Flexibility gives an employee under financial pressure an option other than opting out. They keep their membership and can restore their rate later. The cost is saving foregone while the rate is reduced and, with matching, a lower employer contribution for that period. A formal policy sets the terms in advance; an informal arrangement allows a tailored response but gives employees and payroll less certainty.

*Do you offer structured retirement or mid-career financial planning support?* (n = 263)

No is the common answer, at 72.2% (190 organisations). A structured programme is rare, at 17.1% (45). Signposting only is rare, at 10.6% (28). Support of either kind is reported by 27.7% (17.1% + 10.6%).

Contribution design decides how much goes into a pension. Planning support bears on whether members understand what that saving will provide. A structured programme costs more to run and can be timed to the points where members make retirement decisions. Signposting costs less and leaves more of the work to the employee.

## What the data means for reward decisions

The figures describe how UK employers have set their pension design, not which choices suit a given workforce. Each choice carries a trade-off.

**Rate, basis and matching.** Employer pension money can go on a higher rate applied to a narrow earnings basis, a lower rate on a wider basis, or a matching offer that pays more to those who save more. The same budget produces different outcomes for different employees under each. A reward team might ask what its employer contribution comes to as a percentage of basic pay once the basis is taken into account, and who does not take up its matching offer.

**External reference points.** A reward team might ask whether the PLSA quality-mark threshold is a reference point it wants to use, on which earnings basis it would be measured, and what reaching it would mean for pension's share of total reward spend.

**Defaults and inertia.** Defaults decide outcomes for members who make no choice, whether in the contribution rate, escalation or the fund. The questions here are how many members sit at the default rate and in the default fund, whether each default was set deliberately or inherited, and how a change would affect take-home pay and opt-out.

**Flexibility and support.** Contribution flexibility and planning support address members' behaviour rather than the headline rate. A reward team might ask how many members opt out or stop contributing each year, whether a reduced-rate option would change that, and whether members understand what their pension will provide.

## Frequently asked questions

**What percentage of UK employers offer pension contribution matching?**
In the lumi reward benchmark, 48.2% of UK organisations offer pension contribution matching at some level (19.3% + 14.1% + 10.0% + 4.8%; n = 269, 2026 H1), and 51.7% offer none. Over 3% to 5% is the largest band, at 19.3%, and 14.8% match above 5% (10.0% + 4.8%).

**What is the default pension contribution rate for auto-enrolled joiners in the UK?**
In the lumi reward benchmark, 81.4% of UK organisations set the default employee contribution rate for auto-enrolled joiners at the statutory minimum only (n = 237, 2026 H1; 7 "Not applicable" answers excluded). A default one or more percentage points above the minimum is reported by 14.4% (8.9% + 5.5%), and an opt-up default using auto-escalation by 4.2%.

**How much do employer pension contributions cost as a share of reward spend?**
In the lumi reward benchmark, employer pension contributions cost a median of 7% of total reward spend (n = 268, 2026 H1). The 25th percentile is 5.5% and the 75th percentile is 9.5%, and answers range from 1.5% to 18%.

**Do UK employers calculate pension contributions on qualifying earnings or basic pay?**
In the lumi reward benchmark, 45.3% of UK organisations calculate pension contributions on qualifying earnings and 54.7% use basic or total pay (38.1% + 16.6%; n = 265, 2026 H1). Qualifying earnings is a band, so pay outside it attracts no contribution and two schemes quoting the same rate can pay different amounts.

**How many UK employers meet the PLSA quality-mark threshold?**
In the lumi reward benchmark, 19.7% of UK organisations say their scheme meets the PLSA quality-mark threshold of 12% total and 6% employer contributions (n = 264, 2026 H1), and 80.3% say it does not. Automatic enrolment requires 8% total, at least 3% of it from the employer, so a scheme can sit above that floor and still answer "No".

**Do UK employers offer auto-escalation of pension contributions?**
In the lumi reward benchmark, 35.1% of UK organisations operate auto-escalation of pension contributions (19.8% by default + 15.3% on an opt-in basis; n = 268, 2026 H1), and 64.9% do not. Auto-escalation raises contributions in steps, often timed to pay awards so take-home pay does not fall.

## Related

- [How to set employer pension contributions above the minimum](/guides/how-to-set-employer-pension-contributions) — how to raise the employer rate and cost it.
- [Salary sacrifice and the 2029 NIC cap](/research/salary-sacrifice-2029-cap) — what the cap means for pension salary sacrifice.
- [Group risk benefits](/research/group-risk-benefits-2026) — benchmark data on life assurance, income protection and critical illness cover.

## Notes

- Each figure's base (n) is the number of organisations that answered that question. "Not applicable" answers sit inside the base unless stated. Percentages are rounded to one decimal place, so a distribution may not add up to exactly 100%.
- Two questions exclude "Not applicable" from the base: *What is the default employee contribution rate for auto-enrolled joiners (above statutory minimum)?* (7 answered "Not applicable"; n = 237) and *Does your default pension fund have a published ESG or net-zero commitment?* (27 answered "Not applicable"; n = 204).
- Combined figures are sums of listed option percentages within one question, with the parts shown each time.
- The pension cost question is numeric. Figures are the median, 25th and 75th percentiles and range of the percentages organisations gave.

## Data appendix

All national figures used in this paper, as recorded in the lumi reward benchmark (collection window 2026 H1).

**What type of pension scheme is offered to the main population?**  
Base: 269 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| DC | 89.2% | 240 | common |
| DB | 9.3% | 25 | rare |
| Hybrid | 1.5% | 4 | rare |

**Do you offer pension contribution matching, and up to what level?**  
Base: 269 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| None | 51.7% | 139 | common |
| Over 3% to 5% | 19.3% | 52 | rare |
| Up to 3% | 14.1% | 38 | rare |
| Over 5% to 8% | 10.0% | 27 | rare |
| Over 8% | 4.8% | 13 | rare |

**On what earnings basis are pension contributions calculated (qualifying earnings vs full/basic pay)?**  
Base: 265 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| Qualifying earnings (band) | 45.3% | 120 | common |
| Basic pay | 38.1% | 101 | alternative |
| Total/full pay | 16.6% | 44 | rare |

**Does the scheme meet the PLSA quality-mark threshold (12% total / 6% employer)?**  
Base: 264 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| No | 80.3% | 212 | common |
| Yes | 19.7% | 52 | rare |

**What is the default employee contribution rate for auto-enrolled joiners (above statutory minimum)?**  
Base: 237 organisations · "Not applicable" excluded from base

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| Statutory minimum only | 81.4% | 193 | common |
| 1-2pp above | 8.9% | 21 | rare |
| 3pp+ above | 5.5% | 13 | rare |
| Opt-up default (auto-escalation) | 4.2% | 10 | rare |

**Do you operate auto-escalation of pension contributions (e.g. save-more-tomorrow)?**  
Base: 268 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| No | 64.9% | 174 | common |
| Yes default | 19.8% | 53 | rare |
| Yes opt-in | 15.3% | 41 | rare |

**Does your default pension fund have a published ESG or net-zero commitment?**  
Base: 204 organisations · "Not applicable" excluded from base

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| Standard default | 52.0% | 106 | common |
| ESG-tilted | 32.4% | 66 | alternative |
| Yes net-zero aligned | 15.7% | 32 | rare |

**Do you offer pension contribution flexibility (e.g. reduce to statutory during cost-of-living pressure with easy restore)?**  
Base: 267 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| No | 77.5% | 207 | common |
| Yes formal flexibility | 12.4% | 33 | rare |
| Informal | 10.1% | 27 | rare |

**Do you offer structured retirement or mid-career financial planning support?**  
Base: 263 organisations

| Answer | % of base | Organisations | Prevalence |
|---|---|---|---|
| No | 72.2% | 190 | common |
| Yes structured programme | 17.1% | 45 | rare |
| Signposting only | 10.6% | 28 | rare |

**What do employer pension contributions cost, as a % of your total reward spend?**  
Base: 268 organisations

Median 7 · 25th percentile 5.5 · 75th percentile 9.5 · range 1.5 to 18 %

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