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Automatic Enrolment - Final staging dates and thresholds announced (almost...)

The Department for Work and Pensions has at last given us details of the proposed staging dates for small employers and earnings thresholds for automatic enrolment. Here’s a summary of what the DWP said:

Staging dates

On Friday 23rd March the DWP published a consultation setting out its proposals on staging dates for employers with less than 250 people in their PAYE scheme (the dates for employers with 250 or more people in their PAYE scheme have already been confirmed). Whilst there are no great surprises, there are some oddities (due we think to drafting errors). We’ve put together a table showing the complete proposed staging timetable which you can find here.

It should be stressed that at the moment, this is only a consultation document and as the consultation doesn’t close until 4th May, we probably won’t have the definitive dates until June at the earliest.

Earnings thresholds

The Department for Work and Pensions also published a response to their consultation 'Automatic enrolment earnings thresholds review and revision 2012/2013' on Monday 26th March.

Following that, a draft statutory instrument was laid before Parliament which proposes what these thresholds should be for the 2012/2013 tax year. Quite sensibly, the thresholds have been aligned with tax and National Insurance Contribution (NIC) limits – most employers and payroll providers will already be familiar with these:

  • £8,105 for the automatic enrolment earnings trigger – also the level of the standard tax personal allowance;
  • £5,564 for the lower limit of the qualifying earnings band – also the NIC lower earnings limit;
  • £42,475 for the upper limit of the qualifying earnings band – also the NIC upper earnings limit.

Again, it needs to be stressed that technically, these are just draft regulations and are subject to affirmation from both Houses of Parliament, although we do not expect them to change.

The thresholds must be reviewed ahead of every tax year, although this does not necessarily mean that they will be increased or stay in line with tax/NIC thresholds.

We’ll let you know the full picture as soon as we have the final, final details.

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About the author

Fiona Tait

Jamie Clark

Business Development Manager

A self-confessed 'Pensions Geek', Jamie reads Pensions Acts for breakfast. He's spent the last two years working on automatic enrolment and has talked to hundreds of advisers and employers about how they can best prepare.

Stay up to date with Jamie (@RetirementView) on Twitter.

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The views in this blog are the opinion of the author. They are based on their interpretation of industry developments and current understanding of UK proposed and actual legislation, and should not be interpreted as recommendations or advice.

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