Thresholds Increased For Automatic Pension Enrolment

26 - 03 - 2012

Higher earnings thresholds confirmed by the government for automatic enrolment into pension schemes.

Following consultation, minimum contributions will now be payable on earnings between £5,564 and £42,475. Contributions were originally due to apply to earnings lying between £5,035 and £33,500.

The earnings band has been updated to take into account higher average earnings.
The trigger point at which there is an obligation for staff and employers to make contributions has also increased from £7,475 to £8,105.
The new top-up pension rules were introduced to boost the low level of pension savings amongst UK workers, particularly in the private sector.
The automatic enrolment process will be phased in over six years from October 2012, beginning with the largest employers.
Between four and eight million more workers will be recruited into existing company schemes, or alternatives such as Nest (the National Employer Savings Trust).
The process is intended to be in full effect by 2017 and the obligation on staff and employers to make the minimum level of contributions (a combined 8% of earnings) will come into force in October 2018.






Foremans LLP Umberlla
Foremans LLP