In December 2015, the Department for Work and Pensions (DWP) produced their supporting analysis when reviewing the Earnings Trigger and Qualifying Earnings Band (QEB) thresholds for 2016/17.

This looked at the impacts of changing the Earnings Trigger from £10,000 and removing the alignment between the National Insurance Upper and Lower Earnings Limit and the Upper and Lowers QEBs.  It concluded that:

  • the Earnings Trigger should be maintained at £10,000.  As Auto-Enrolment will enter a ‘crucial stage’ in 2016/17 with the staging of smaller employers, it was felt that the voluntary opt-in process was the most effective way for people to enter pension saving when earning below this threshold.  This is particularly significant given that April 2016 sees the new higher National Living Wage rate
  • the QEBs should remain aligned with the National Insurance thresholds

Therefore, the DWP proposes the following annual figures (with the 15/16 rates detailed as well):

Threshold

2015/16

2016/17

QEB Lower Limit

£5,824 (LEL)

£5,824 (LEL)

QEB Upper Limit

£42,385 (UEL)

£43,000 (UEL)

Earnings Trigger

£10,000

£10,000

The only threshold that changed in 2016/17 compared to 2015/16 is the QEB Upper Limit.

For common Pay Reference Periods, this translates as follows:

Auto-Enrolment Thresholds 2016/17

Weekly

2 Weekly

4 Weekly

Monthly

Quarterly

6 Monthly

QEB Lower Limit

£112

£224

£448

£486

£1,456

£2,912

QEB Upper Limit

£827

£1,654

£3,308

£3,583

£10,750

£21,500

Earnings Trigger

£192

£384

£768

£833

£2,499

£4,998

The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2016 in Great Britain will set these figures in legislation.  Note that a similar announcement has not yet been made in Northern Ireland by the Department for Social Development who are responsible for this devolved area.  The above proposals relate to Great Britain only.

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