A disaster in the making? DWP’s decision on the automatic enrolment trigger

I warned on this blog [Touchstone] back in October about the potentially dire consequences of linking the automatic enrolment earnings trigger to the personal income tax allowance. But this is exactly what the government has done. From April 2013, anybody earning less than £9,440 will not be automatically enrolled into a workplace pension.

So they will not be saving for retirement, and they will miss out on receiving an employer contribution into their pension pot. Some will be able to ‘opt in’ (if they earn above £5,668) but the whole point of automatic enrolment is that it is supposed to remove the need for workers to make an active decision to join a workplace pension scheme, with employer contributions, which for all intents and purposes should be considered a standard and legitimate element of their remuneration.

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Image: Karen Bryan