The Department for Work and Pensions (DWP) has produced its supporting analysis as part of the annual review of auto-enrolment thresholds for 2016/17, recommending they remain unchanged.
As a requirement of the Pensions Act 2008 in Great Britain, 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, and
• “The general level of prices in Great Britain… 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. However, the DWP has recommended that no changes are made and, therefore, 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 in Great Britain will set these figures in legislation.
Ian Holloway, head of legislation and compliance at Cintra HR & Payroll Services, commented: “Importantly, the Pensions Act 2008 does not apply in Northern Ireland, as this is a devolved responsibility. However, Northern Ireland does have a similar requirement to review its own thresholds under the Pensions (No.2) Act (Northern Ireland) 2008. The comfort is that the thresholds have always been aligned throughout the United Kingdom, albeit courtesy of differing legislation, so let’s hope they remain aligned in 2016/17.”