Automatic enrolment earnings trigger and qualifying earnings band

Matthew Barrand Auto-enrolment, Blog

The Government has announced the earnings trigger and qualifying earnings band for auto-enrolment purposes for 2021/22.

The earnings trigger is one of the three key factors which ultimately governs who
gets enrolled into a workplace pension scheme through automatic enrolment. The government’s view remains that if the trigger is too high, then low to moderate earners who can afford to save (and who are the main target group of the policy), may miss out on the benefits of a workplace pension. Set it too low, however, and the predominant impact will be upon people for whom it could make little
economic sense to save into a pension and thereby divert income away from their day-to-day needs.

The Secretary of State has considered the latest analytical evidence and the policy objectives and has concluded that the existing threshold of £10,000 remains the correct level at this point in the establishment of automatic enrolment and will not change for 2021/22.

The qualifying earnings band will be £6,240 to £50,270 in 2021/22 (so no change to the lower threshold and an increase of £270 to the higher threshold).