A committee of MPs have sent out a warning to workers as research has revealed that the majority of them are not saving enough for retirement.

The Work and Pensions Committee found that even after a decade since auto-enrolment onto pension schemes around 60% of workers are at risk of missing out on an adequate standard of living in retirement.

Minimum contributions into pensions are too low and many self-employed and gig economy workers are being excluded from pension saving altogether, it added.

The committee did clarify that it did not expect people to be making higher contributions during the cost of living crisis but urged the Government to draw up a plan to introduce higher minimum contributions in the near future.

Bury Times: Even after auto enrolment was implemented some people will not save enough at the current rate (PA)Even after auto enrolment was implemented some people will not save enough at the current rate (PA) (Image: PA)

At the moment the minimum contribution is 8% of the eligible salary, of which 3% comes from employers.

Automatic enrolment into workplace pensions started on October 1 2012, but the committee found many newly-enrolled people made minimum contributions not being aware that it would not be enough to save for retirement.

Analysis by the Pensions Policy Institute showed that only 39% of households and 37% of individuals are on track for an adequate pension, according to the definition used by the Pensions Commission.

Sir Stephen Timms, chair of the Work and Pensions Committee, said: “While automatic enrolment has been successful in boosting participation in workplace pension saving, many people will be feeling a false sense of security holding on to the idea that putting away the minimum amount will be enough to enjoy a fulfilling retirement.

Bury Times: Currently only around 37 per cent of individuals will save enough for retirement (PA)Currently only around 37 per cent of individuals will save enough for retirement (PA) (Image: PA)

“The blunt truth is that many employees need to save more but do not realise it. The Government must urgently consider how to boost saving, including examining the case for increasing minimum contributions, before it is too late.”

He continued: “With many struggling through a cost-of-living crisis now is not the time to ask people to find extra money for their pensions, but this does not mean that the new team of DWP ministers can sit on their hands and ignore the dark clouds gathering on the horizon for a future generation of pensioners.

“Without action to prepare the ground now, many people will feel the reality of this coming catastrophe in their later years.”