Proposed earnings trigger and qualifying earnings bands 2019-20
05 December 2018
The automatic enrolment earnings trigger determines at what point an eligible person gets automatically enrolled into a workplace pension.
The qualifying earnings band sets minimum contribution levels for money purchase pension schemes. The minimum of the band is also relevant for defining who can opt in if they earn under the earnings trigger. The government conducts a review of these figures every year and revises them if appropriate.
The Automatic enrolment: review of the earnings trigger and qualifying earnings band for 2019/20 contains the proposals for the 2019-20 tax year; as per the table below.
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Current and proposed automatic enrolment thresholds |
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|
Trigger |
Upper limit qualifying earnings band |
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|
Current (2018/19) |
£10,000 |
£6,032 |
£46,350 |
|
Proposed (2019/20) |
£10,000 |
£6,136 |
£50,000 |
According to the latest review the Secretary of State has considered the latest analytical evidence and the policy objectives and has concluded that the existing threshold of £10,000 remains the correct level at this point in the establishment of automatic enrolment.
The review states that all review factors have been considered against the analytical evidence and the decision is to maintain the link with the National Insurance Contributions Lower Earnings Limit at its 2019/20 value of £6,136 by setting this as the value of the lower limit of the qualifying earnings band.
And mandatory employer contributions should still be capped, according to the review, so the National Insurance Contributions Upper Earnings Limit at its 2019/20 value of £50,000 is the factor that should determine the upper limit of the qualifying earnings band.