Many of the six million people who have now been automatically placed into a workplace pension are saving far short of what they will need to be able to afford to retire, a former pensions minister has warned.
A report from the Pensions Regulator showed that by the end of March 2016, more than 6.1 million workers had been successfully automatically enrolled since the reforms to encourage a stronger savings culture were introduced in 2012.
The Pensions Regulator said pension saving is now becoming "the norm", with two-thirds (66%) of employees now active members of a pension scheme, compared with just 47% in 2012.
Under the automatic enrolment scheme, employees contribute a portion of their wages into their pension, with contributions also coming from employers as well as tax relief.
Minimum contributions are being gradually phased upwards, so that from April 6 2019 they will increase to 8% of qualifying earnings, of which a minimum of 3% must come from the employer.
But Steve Webb, a former pensions minister who is now director of policy at Royal London, highlighted figures in the report showing what he described as "disappointing" employer contributions so far.
The Pensions Regulator said the average employer contribution so far is 3%.
Concerns have been raised that some workers may think that they can enjoy a comfortable retirement just by themselves and their employer making the minimum contributions, rather than trying to save more.
Mr Webb said: "It is great news that over six million people have been successfully automatically enrolled into workplace pensions, reversing decades of decline.
"But the amounts going in to those pensions remain far short of what is needed for a comfortable retirement. Given that the firms who have so far taken part in automatic enrolment are the largest employers, the average contribution rate of just 3% is particularly disappointing.
"The 2017 automatic enrolment review needs to consider how we get combined employer and employee contributions up to a realistic level as a matter of urgency. Without this, millions of today's workers will simply find that they cannot afford to retire."
Automatic enrolment has already been rolled out across the biggest employers, which tend to have the most experience of pensions, and the focus has now moved to smaller employers, many of whom will just employ one or two people.
Employers must enrol all eligible jobholders into a qualifying pension scheme and make contributions. This applies to workers aged at least 22 but under state pension age, usually working in the UK and earning more than £10,000 per year.
The Pensions Regulator said so far, compliance rates among the first group of small and micro employers to undergo automatic enrolment are above 95%.
Charles Counsell, executive director for automatic enrolment, said: "The compliance rates achieved have been consistently at the top of our expectations and the savings landscape has been transformed. But we know the job is not yet done and there are still significant challenges ahead."