Automatic enrolment – review of threshold
LITRG’s response to this DWP consultation supports maintaining alignment of the automatic enrolment threshold with the level of the personal allowance for simplicity. We suggest, however, that this is kept under review – with particular regard to affordability of contributions by reference to the National Minimum Wage, the true ‘living wage’ and future increases in minimum contribution levels.
Our response also includes recommendations on ensuring clear guidance for Universal Credit claimants on the interaction of pension contributions and their expected benefit levels, and to better promote the ability to opt in to a workplace pension with an employer contribution for those with lower earnings.
Finally, crucial to ensuring fairness in the system for all lower-paid employees is to ensure that all benefit from tax relief on their pension contributions, regardless of whether their employer operates a ‘net pay arrangement’ or ‘relief at source’.
The LITRG response can be found here.