Guy Opperman confirms Automatic Enrolment earnings trigger will remain unchanged at £10,000

19 February 2020

In a written statement, Pensions Minister, Guy Opperman, confirmed that, for tax year 2020-2021, the Automatic Enrolment earnings trigger will remain at £10,000, for the seventh year running.

Mr. Opperman also confirmed that there will be no changes to the lower and upper limit of the qualifying earnings band. He said:

“The main focus of this year’s annual review of the AE earnings trigger and qualifying earnings band (the AE thresholds) is to ensure the continued stability of the policy whilst learning from the April 2019 AE contribution rate increase. 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 threshold.”

There have been numerous calls throughout the pensions industry for the auto-enrolment earnings trigger to be lowered to include those that are on a lower salary and people who work less hours, which appears to be predominantly women and those from ethnic minorities, according to the director of policy at The People’s Pension, Greg McClymont. He said that previous government analysis has shown that lowering the auto-enrolment earnings trigger to the national insurance threshold of just over £6,000 would help an additional 1.2 million people. He commented:

“A big majority of these people would be women, and a significant percentage from ethnic minorities, helping address stark gender and ethnicity pension gaps.”

 


Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.