Personal Pension  

Gov’t confirms £10k auto-enrolment pay trigger

The minimum earnings auto-enrolment trigger is to be kept at its current £10,000, the government has confirmed.

In October, the Department for Work and Pensions’ proposed freezing the minimum earnings threshold for people being auto-enrolled for the 2015/16 year, as one of four options up for consultation on the pay trigger for contributions.

The four options under consultation are:

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• freezing the trigger at its current level of £10,000;

• raising the trigger by indexation (CPI or earnings);

• increasing the trigger to £10,500 in line with the threshold for paying income tax; or

• using the Pension Commission benchmark replacement rate to determine the trigger.

The government’s response to the consultation on revision proposals for the auto-enrolment earnings trigger and the qualifying earnings band said it will stick with £10,000 for minimum earnings trigger.

The lower limit for the qualifying earnings band has been confirmed as £5,824 and the upper limit of the qualifying earnings band was set at £42,385.

The government said it received 37 formal written responses, with the National Association of Pension Funds stating that freezing the trigger at £10,000 strikes the “right balance between simplicity and coverage”.

The order will require approval from both Houses before the regulations can be made. It will come into force from 6 April 2015.

donia.o’loughlin@ft.com