Matt Calveley, of pensions advice firm Isio, said: “Employees should have the option to ‘opt down’ to lower contributions while still benefiting from employer support.”
The IFS also said 3pc employer contributions should be made universal for almost all workers. This would boost employers contributions by £4bn a year, according to its analysis.
David Sturrock, of the IFS, said: “There is a strong case for almost all employees to receive an employer pension contribution, irrespective of whether they make a contribution themselves. That would be a bigger change to the system – and one that would likely be of particular benefit to many low earners.”
In addition, the think tank recommended lowering the auto-enrolment age from 22 to 16.
Workers that are currently under-saving into their pension could be up to £1,400 to £2,100 per year richer in retirement because of its suggested reforms, the IFS said.
But it comes as Ms Reeves is also pressure to scrap pension tax relief for higher earners. Together with increased pension contributions, higher earners could find their incomes significantly squeezed. Savers currently enjoy 20pc tax relief on pension contributions with an extra 20pc available for higher earners.
The Chancellor has also been told to limit the amount that retirees can take from their pension pots tax-free.
Currently savers can access 25pc of their retirement pots tax-free at age 55 up to a value of £286,275. But the IFS has called on Ms Reeves to cap this at £100,000 in order to raise around £2bn a year for the Treasury.
In August the Government launched a pension review, with the first stage focusing on boosting investment and the second on improving retirement adequacy.
A Government spokesman said: “We will ensure the pensioners of tomorrow have the dignity and security they deserve in retirement as we carry out our landmark pensions review to boost investment, increase pension pots and tackle waste in the pension system.”