Auto Enrolment Threshold 2016 / 2017 Unchanged
The Auto Enrolment threshold for 2016 / 2017 will remain unchanged. This follows a recent Department for Work and Pensions (DWP) report recommending they remain unchanged. It provides supporting analysis as part of the annual review of auto-enrolment thresholds for 2016 / 2017.
The DWP Review of the earnings trigger and qualifying earnings band for 2016/2017 report suggests that auto enrolment is now entering a crucial stage in the roll out of this major reform. It is not considered to be the right time to make significant changes to the existing framework.
As a requirement of the Pensions Act 2008 the DWP is required to review the thresholds considering the following factors:-
- The personal tax allowance.
- The thresholds for National Insurance Contributions.
- The state pension.
- The general level of prices in the UK which are estimated in such a manner that the Secretary of State thinks fit.
The latest review has looked at the impacts of changing the earnings threshold from the current £10,000 and removing the alignment of the Qualifying Earnings Bands (QEB) with the National Insurance Thresholds. The DWP has recommended that no changes are made and have proposed the following annual figures for 2016/17:-
- Earning Trigger £10,000 (unchanged from 2015/16).
- Lower QEB £5,824 (unchanged from 2015/16).
- Upper QEB £43,000 (aligned to the 2016/17 Upper Earnings Limit).
The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2016 will set these figures in legislation. The Government is to keep the earnings trigger under review. The outcome of the consultation into pensions tax relief and the introduction of the National Living Wage which comes into effect in April 2016 will be considerations in the next review.
A copy of the full DWP report can be found here.
Auto Enrolment Threshold 2016 / 2017 Unchanged – Highland Payroll Services
