Martin Lewis' MSE issues advice to anyone over 18 who can get ‘hidden pay rise’

These changes means the age at which workers are automatically placed in a workplace pension would be 18, rather than 22.

As of 19 September the legislation was given the go ahead to become law. Under this Act, the government also now has the power to lower the minimum earnings threshold at which employers have to contribute towards workplace pensions from £6,240 a year to £1 a year, known as the lower earner’s limit. So, a person must earn at least £6,240 to be able to contribute to their workplace pension.

However, the new proposed changes do not change the existing £10,000 minimum earnings threshold to be automatically opted into a workplace pension.

According to estimates from financial services provider Legal and General, if the changes took place with immediate effect - which MSE says won’t happen as the government must consult on how and when these powers will be used - the average 18-year-old saving into a pension would now have an additional £430,694 in their pension pot once they reach 65, compared to if they started saving from the age of 22. Meanwhile, the average woman would bank an additional £378,997.

Under the current rules, people aged between 22 and state pension age, which is 66 but has risen in recent years and is set to rise to 67 on 6 May 2026 for those born on or after April 1960.

The numbers have been crunched by experts at Interactive Investor (ii) and found that the proposed changes could give workers a massive payout.

For example, someone earning £20,000 at age 18 and paying into their pension until the age of 66 could receive a retirement boost of £159,000 from the changes. This is up from £187,000 with the lower earner’s limit.

And if you find yourself on a salary earning £30,000 when you’re 18 - which would be seriously impressive - and you continue contributing to a pension until you’re 66, you could get a retirement boost of £199,000, which isn’t too shabby at all.