On 18 December 2017, the Department for Work and Pensions (DWP) produced their supporting analysis when reviewing the Earnings Trigger and Qualifying Earnings Band (QEB) thresholds...
for 2018/19 tax year (on the 22nd they revised it in light of errors in the original document!). View the supporting analysis document.
The Governing Principles
This is a statutory annual review governed by three established principles:
- Ensuring the right people are bought into pension saving (via Auto-Enrolment / workplace pensions) by reviewing the Earnings Trigger
- Ensuring an appropriate portion of earnings are taken into consideration for contributions by establishing the Qualifying Earnings Bands (QEBs)
- Ensuring a balance between the benefits to workers and the cost to employers whilst maintaining simplicity
It is important to say that the report contains only conclusions and proposals. These are:
- The Earnings Trigger should be maintained at £10,000
- The QEBs should remain linked with the National Insurance thresholds (Lower and Upper Earnings Limit)
Therefore, the DWP proposes the following annual figures (with the 17/18 rates detailed as well for comparison):
For common Pay Reference Periods, this translates as follows:
There will be two pieces of legislation to look out for in early 2018 given that this is a devolved area:
- The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2018 laid by the DWP in Great Britain under provisions in the Pensions Act 2008
- The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order (Northern Ireland) 2018 laid by the Department for Communities in Northern Ireland under provisions in the Pensions (No. 2) Act (Northern Ireland) 2008