The Department for Work and Pensions (DWP) has announced its backing for proposals which could lower the age at which people are automatically enrolled into a workplace pension to 18. Currently, employers must automatically enrol workers into a pension scheme and make contributions if they are aged between 22 and the State Pension age and earn at least £10,000 a year.
The Lower Earnings Limit, at £6,240, is the minimum level of an enrolled worker’s earnings on which they and their employer have to pay contributions. Conservative MP Jonathan Gullis’s Private Members’ Bill, backed by the UK Government, grants two extensions to automatic enrolment - abolishing the lLower Earnings Limit for contributions and reducing the age for being automatically enrolled to 18.
Removing the earnings limit could help to bring more lower earners and people working part-time jobs into automatic enrolment. The Bill cleared its first hurdle after MPs gave it an unopposed second reading, it will now undergo further scrutiny at a later date and is on track to become law.
