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Automatic Enrolment Annual Earnings Trigger and Qualifying Earnings Band Review

Volume 650: debated on Tuesday 4 December 2018

Automatic enrolment into a workplace pension has been a great success to date with over 9.9 million people having been automatically enrolled and all employers now having to comply with their automatic enrolment duties following the completion of the staged roll-out of the duties in March this year. More than 1.4 million employers have met their duties and overall annual pension saving for eligible employees has increased by £11.7 billion since 2012. The second phased increase in the minimum contribution rates to 8% will happen in April 2019.

The main focus of this year’s annual review of the automatic enrolment thresholds is to ensure the stability of the policy during the contribution increase next April. We also want to ensure that our approach continues to enable individuals, for whom it makes economic sense, to save towards their pensions whilst also ensuring affordability for employers and Government. The review has concluded that the earnings trigger will remain at £10,000 and both the lower and upper earnings limits will continue to be aligned to the national insurance contribution thresholds.

I intend to lay an order before Parliament in the new year which will include the following, for 2019-20:

£50,000 for the upper limit of the qualifying earnings band.

£6,136 for the lower limit of the qualifying earnings band.

The automatic enrolment earnings trigger will be maintained at £10,000.

I will place a copy of the analysis supporting the proposed revised thresholds in the House Library. These papers will be available later today on the website.

Attachments can also be viewed online at: http://www.