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Pensions Minister Torsten Bell has confirmed that all automatic enrolment (AE) thresholds will be maintained at their 2024/25 levels in 2025/26, as the government looks to balance adequacy and affordability considerations.
In a written statement, Bell confirmed that this year's annual statutory review of the thresholds within AE has now been completed, and that all AE thresholds will be maintained at their current levels.
This means that the AE earnings trigger will remain at £10,000, while the lower earnings limit of the qualifying earnings band will remain at £6,240, and the upper earnings limit of the qualifying earnings band will remain at £50,270.
The supporting analysis from the Department for Work and Pensions (DWP) showed that this represents a decrease in real terms in the value of the trigger, estimating that, as earnings continue to grow, keeping the earnings trigger at £10,000 will see private sector pension participation at 15.7 million in total.
It also showed that maintaining the lower earnings limit would help to ensure that pension savings in 2025/26 will be broadly maintained, and slightly increased, compared to 2024/25.
Given this, it said that the decision to keep the AE lower earnings limit at the existing level is consistent with the government’s ambitions to improve financial resilience for retirement, in particular among low and moderate earners.
In the review, the DWP highlighted the decision as a reflection of the need to balance the affordability for employers and individuals, and the policy objective of giving those who are most able to save the opportunity to accrue a meaningful level of retirement savings.
Indeed, Bell explained that the main focus of this year’s annual statutory review of the AE earnings trigger and lower and upper earnings limits of the qualifying earnings band was to ensure the continued stability of AE for employers and individuals.
"It is important that AE works for individuals, supporting those for whom it makes economic sense to save towards their pensions whilst also ensuring affordability for employers and taxpayers," he added.
Despite the lack of change, Bell also said that the government is "committed" to looking at long-term steps it can take to further improve pension outcomes.
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