This document sets out the government’s response to the consultation to review the earnings thresholds for automatic enrolment into a workplace pension for April 2015 to March 2016. 37 responses to the consultation were received in total.
Responses to the earnings trigger aspects of the consultation were split fairly evenly between those who favoured the simplicity and predictability of alignment with the Income Tax threshold and those who were concerned that alignment would exclude too many from pension saving. The majority of respondents, regardless of their favoured option, stressed the importance of having a trigger that is simple to administer and to explain. Most respondents were in favour of maintaining alignment with National Insurance (NI) thresholds when it came to the qualifying earnings band although a sizeable minority thought the lower limit should be removed altogether to introduce savings from the first pound earned. The upper limit was more widely supported with most who responded agreeing that it met the policy intent.
The government propose to lay a draft Revision Order before Parliament in early 2015 which specifies the following amounts:
- £10,000 for the automatic enrolment earnings trigger;
- £5,824 for the lower limit of the qualifying earnings band;
- £42,385 for the upper limit of the qualifying earnings band.