Automatic enrolment earnings thresholds confirmed after consultation

17 December 2014

The Government has now confirmed the upper and lower thresholds which employers should use for 2015-16. This follows a consultation to seek views on how these thresholds should be set.

The announcement confirms that for 2015-16:

· £5,824 will be the lower limit of the qualifying earnings band

· £42,385 will be the upper limit of the qualifying earnings band

Employers should use the amount someone earns between the lower and upper qualifying bands to work out how much that person must pay into a workplace pension.

The amount someone must earn to be automatically enrolled into a workplace pension (the earnings trigger) will remain at £10,000.

The note says that “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.”