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HomeFinancial PlanningAuto-enrolment thresholds frozen for 2023/24

Auto-enrolment thresholds frozen for 2023/24

The federal government has confirmed that, after its newest overview, auto-enrolment thresholds can be held at their present ranges for the subsequent yr.

It means the automated enrolment earnings set off will stay at £10,000.

In the meantime the decrease earnings restrict of the qualifying earnings band will stay at £6,240 for 2023/24 and the higher earnings restrict will stay at £50,270.

Laura Trott, under-secretary of state for pensions, made the announcement in a written assertion on Thursday 26 January, stressing that the present cost-of-living disaster and affordability had affected their choice.

She mentioned: “The primary focus of this yr’s annual overview [of the AE thresholds] has been to make sure the continued stability of the coverage in mild of the affect of Covid-19 and prevailing financial components.

“We need to make sure that our strategy continues to allow people, for whom it makes financial sense, to save lots of in direction of their pensions whereas additionally guaranteeing affordability for employers and taxpayers.”

In the meantime separate evaluation printed on Thursday by the Pensions Regulator confirmed combination asset values in occupational DC schemes at the moment are £143bn.

That is a rise of £29bn or 26% since final yr and 546% for the reason that starting of 2012. The info confirmed membership of DC schemes has soared 1069% since auto-enrolment started.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown mentioned: “At present’s assertion may have come as no shock given the big financial challenges persons are going through.

“Any transfer to extend the quantity going right into a pension by actively decreasing or eradicating earnings limits could also be sufficient to tip individuals over the sting and choose out.”

Nonetheless, she identified that freezing the set off and decrease earnings limits will see extra individuals being introduced into auto-enrolment in the event that they get a pay enhance.

Ms Morrissey mentioned: “It’s clear there’s extra work to be achieved on auto-enrolment – we do want to search out methods of getting individuals to contribute extra and the federal government has come beneath strain to stipulate a timetable for the introduction of the 2017 Auto-enrolment Assessment reforms which would definitely have a optimistic impact if they are often launched at some extent when this disaster has handed.”

The assertion from Laura Trott, under-secretary of state for pensions may be discovered right here

The Pensions Regulator’s DC scheme return information is right here



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