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Govt to increase auto-enrol earnings trigger to £9,440

Steve Webb 480 LibDems DWP

The Government has confirmed it plans to increase the lower earnings trigger for automatic enrolment from £8,105 to £9,440 for 2013/14, keeping the figure in line with the income tax threshold.

Under auto-enrolment rules, workers with annual wages above the earnings trigger will be auto-enrolled into a workplace pension scheme.

The decision to increase the earnings trigger will exclude 420,000 people from auto-enrolment, some 76 per cent of whom will be women.

The DWP has also proposed a lower qualifying earnings limit of £5,668 and an upper limit of £41,450. Currently, the lower limit is £5,564 and the upper limit is £42,475.

Aegon regulatory strategy manager Kate Smith says: “Aligning the earnings trigger to the income tax threshold is the right decision because it will make things as simple as possible for employers and members.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I bet Tescos and Morrisons are chuffed about that.

  2. So the people that NEST was meant to target arent going to be targeted?

  3. This upgrade may raise an interesting question. Currently, wage levels in the private sector do not appear to be rising, so it is possible for the rise in the Trigger Threshold to move an employee from a “must enrol” category to a “don’t need to enrol” category. Does the legislation cover this point, or can the employer legitimately stop paying pension contributions until the employee goes through the trigger point again?

  4. @ Glen.

    I reckon so Glen. Good idea this banded earnings lark! Far more straightforward than a % of basic……

  5. I do wish MM would stop publishing pictures of Steve Webb in ‘action’ positions. It will give rise to a Christmas auto enrolment amusing caption contest at this rate.

  6. On the trigger point above they would be non eligible but if the employee chose to join then the employer has to pay. Those over the 5564/5668 salary but under 8105/9440 can still join but the employer does not have to pay (eligible).

  7. Alistair Paterson 14th December 2012 at 2:30 pm

    No need to worry. Nobody needs any advice about any of this anyway, do they ???

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