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ABI in threshold warning

The ABI warns that raising the auto-enrolment lower earnings’ threshold to only £7,475 risks leaving some people worse off from saving.

Some respondents, including the ABI and Standard Life, called for an earnings’ limit of £10,000 to ensure all people benefited from saving into a pension, even if means-testing is abolished from pensions.

ABI acting director general Maggie Craig says: “The financial crisis has shown just how important it is for people to save and prepare for their financial future. If automatic enrolment is to succeed, people have to feel confident it will pay for them to save.

“We think it is right to raise the income threshold someone has to earn before being automatically enrolled, although we would have preferred a higher level of £10,000 to make sure that more people clearly benefit from saving.”

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