Automatic Enrolment into workplace pensions (AE) has been a huge success to date. Since its introduction in 2012, over 10 million people have been automatically enrolled and savings by eligible employees has increased by £28.4 billion. This has been achievable through the 1.9 million employers who have played a crucial role by enrolling their employees and paying contributions as appropriate.
An objective of this year’s annual review of the AE earnings trigger and qualifying earnings band (the AE thresholds) is the continued stability of the policy. We also want to ensure that our approach continues to encourage individuals to save towards their pensions whilst ensuring affordability. Our approach is designed so that everyone who is automatically enrolled continues to pay contributions on a meaningful proportion of their income. The review has concluded to freeze all AE thresholds for 2022/23 at 2021/22 levels. This is consistent with our ambitions to build a stronger, more inclusive savings culture. The Government is considering what more can be done to enable people to have greater financial security in retirement.
The 2022/23 Annual Thresholds:
- The Automatic Enrolment earnings trigger will remain at £10,000,
- The lower earnings limit of the qualifying earnings band will remain at £6,240,
- The upper earnings limit of the qualifying earnings band will remain at £50,270.
The analysis supporting the proposed revised AE thresholds will be published in due course. A copy of this will be placed in the house library and will be available on the www.gov.uk website, following publication.
This statement has also been made in the House of Lords