Reducing AE earnings trigger to NI lower earnings limit would bring in 214,000 workers

A reduction in the auto-enrolment (AE) earnings trigger to £6,396 (the National Insurance lower earnings limit) would bring an additional 214,000 workers into scope, Pensions Minister, Guy Opperman, has stated.

In response to a parliamentary question, Opperman divulged that, in addition to drawing in more workers, the reduction in earnings trigger would increase contributions by £124m in 2022/23, compared to increasing the trigger by average earnings growth.

These figures come in response to a question from Conservative MP for North West Durham, Richard Holden, who enquired if the government would make an assessment of the increase in tax relief for part-time workers that would result from AE being extended to those earning under £10,000 a year, and what proportion of that amount would benefit men and women respectively.

Opperman responded by saying that, of the additional contributions, £8m would be through increased income tax relief.

Furthermore, 78 per cent of the additional contributions would benefit women and 22 per cent would benefit men, he noted.

This comes in the aftermath of the annual review of the AE earnings trigger, published on 8 February 2021, which reviewed the 2022/23 thresholds and discovered that by remaining at £10,000, an additional 17,000 workers would be brought into scope.

The decision to keep the earnings trigger at £10,000, according to the government, reflected the “key balance that needs to be struck between affordability for employers and individuals and the policy objective of giving those who are most able to save the opportunity to accrue a meaningful level of savings with which to use for their retirement.”

    Share Story:

Recent Stories


DB risks
Laura Blows discusses DB risks with Aon UK head of retirement policy, Matthew Arends, and Aon UK head of investment, Maria Johannessen, in Pensions Age's latest video interview

Sustainable equity investing in emerging markets
In these highlights of the latest Pensions Age video interview, Laura Blows speaks to Premier Miton Investors fund managers, Fiona Manning and Will Scholes, about sustainable investing in equities within emerging markets

Keeping on track
In the latest Pensions Age podcast, Sophie Smith talks to Pensions Dashboards Programme (PDP) principal, Chris Curry, about the latest pensions dashboards developments, and the work still needed to stay on track
Building investments in a DC world
In the latest Pensions Age podcast, Sophie Smith talks to USS Investment Management’s head of investment product management, Naomi Clark, about the USS’ DC investments and its journey into private markets

Advertisement