Automatic Enrolment: Earnings Trigger and Qualifying Earnings Band Review 2024/25 and Alternative Qu
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)
Automatic enrolment (AE) into workplace pensions has been a great success to date. Since 2012 over 11 million people have been enrolled into a pension and over 2.3 million employers have met their automatic enrolment duties. Since the introduction of AE, total annual pension saving by eligible employees has increased by nearly £29 billion in real terms. The Government remain committed to building on this achievement and to transforming retirement prospects for millions of workers.
The main focus of this year’s annual review of the AE earnings trigger and lower and upper earnings limits of the qualifying earnings band (the AE thresholds) has been to ensure the continued stability of the policy in light of prevailing economic factors. We want to ensure that our approach continues to enable individuals, for whom it makes economic sense, to save towards their pensions while ensuring affordability for employers and taxpayers. The review has concluded that all AE thresholds for 2024-25 will be maintained at their 2023-24 levels. This is consistent with our ambitions to build a stronger, more inclusive savings culture that enables people to have greater financial security in retirement.
The 2024-25 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 alternative quality requirement triennial review
In accordance with the statutory timetable, we have also conducted a review of the regulations that introduced the alternative quality requirements for pension schemes being used for automatic enrolment into workplace pensions.
This review concluded that the alternative quality requirements for UK defined-benefit schemes set out in regulations, made under section 23A(1) of the Pensions Act 2008, should continue to remain in place without changes at this time.
The review also concluded that the tests set out in section 28(2A) of the Pensions Act 2008 continue to be satisfied.
The analysis supporting the thresholds review and the Government response to the call for evidence for the alternative quality requirements reviews will be published and copies placed in the Library of the House. They will both be available on the www.gov.uk website, following publication.
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