Automatic Enrolment Earnings Trigger Update

by | Jan 25, 2018 | News

Automatic Enrolment Earnings Trigger Update

by | Jan 25, 2018 | News

Automatic Enrolment: Proposed earnings trigger and qualifying earnings bands for 2018/19 tax year

The latest change to automatic enrolment concerns the automatic enrolment earnings trigger. This is proposed to be frozen at £10,000 for 2018/19, whilst the lower and upper thresholds are to remain in alignment with National Insurance contributions, the Lower Earnings Limit and the Upper Earnings Limit.

What is the Automatic Enrolment Earnings Trigger?

The automatic enrolment earnings trigger determines at what point an eligible person gets automatically enrolled into a workplace pension. The qualifying earnings band sets minimum contribution levels for money purchase pension schemes. The minimum of the band is also relevant for defining who can opt in if they earn under the earnings trigger. The government reviews these every year and revises them if appropriate.

The Government has announced its proposed automatic enrolment earnings trigger and qualifying earnings bands for 2018-19.

Current and proposed automatic enrolment thresholds
  Automatic Enrolment Earnings Trigger Lower limit qualifying earnings band Upper limit qualifying earnings band
Current (2017/18) £10,000 £5,876 £45,000
Proposed (2018/19) £10,000 £6,032 £46,350

Key Considerations in Making These Proposals

  • Stability for employers. This is important, because, with staging not yet complete and the phasing of contributions (the planned increases in minimum contribution rates for qualifying scheme) set to begin in April 2018, employers need to see some short term stability.
  • Removing the immediate prospect of additional change from employers when they are preparing for the upcoming contribution increases will allow for a smooth transition into the start of phasing while still providing a meaningful level of contributions for savers.
  • Additionally, the current triggers and limits are well understood by employers, and will continue to provide an important element of consistency for both employers and individuals in the coming year while still striking a balance between providing meaningful levels of saving and affordability.

We can help with Automatic Enrolment at JLP

Automatic enrolment is here to stay, of course, but it can seem complicated, especially if you run a small business and do not have a separate HR/Payroll department to manage the process.

We can take the strain for you, helping and advising all along the way, and ensuring your payroll is correct to. Contact us or call us on 0121 422 0550 for an initial discussion.


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