Auto-enrolment thresholds frozen for 2023/24

The government has confirmed that, after its latest review, auto-enrolment thresholds will be held at their current levels for the next year. It means the automatic enrolment earnings trigger will remain at £10,000. Meanwhile the lower earnings limit of the qualifying earnings band will remain at £6,240 for 2023/24 and the upper earnings limit will remain at £50,270. Pensions minister Laura Trott made the announcement in a written statement on Thursday 26 January, stressing that the current cost-of-living crisis and affordability had affected their decision. She said: “The main focus of this year’s annual review [of the AE thresholds] has been to ensure the continued stability of the policy in light of the impact of Covid-19 and 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 also ensuring affordability for employers and taxpayers.” Meanwhile separate analysis published on Thursday by the Pensions Regulator showed aggregate asset values in occupational DC schemes are now £143bn. That is an increase of £29bn or 26% since last year and 546% since the beginning of 2012. The data showed membership of DC schemes has soared 1069% since auto-enrolment began. Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said: “Today’s statement will have come as no surprise given the enormous economic challenges people are facing. “Any move to increase the amount going into a pension by actively reducing or removing earnings limits may be enough to tip people over the edge and opt out.” However, she pointed out that freezing the trigger and lower earnings limits will see more people being brought into auto-enrolment if they get a pay increase. Ms Morrissey said: “It is clear there is more work to be done on auto-enrolment - we do need to find ways of getting people to contribute more and the government has come under pressure to outline a timetable for the introduction of the 2017 Auto-enrolment Review reforms which would certainly have a positive effect if they can be introduced at a point when this crisis has passed.” The statement from Laura Trott, under-secretary of state for pensions can be found here The Pensions Regulator’s DC scheme return data is here

Auto-enrolment thresholds frozen for 2023/24

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