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.”