Draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2020

Bambos Charalambous Excerpts

Monday 23rd March 2020 General Committees

[Bambos Charalambous (Enfield, Southgate) (Lab)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. As the Minister has explained, the draft order revises the lower threshold of the automatic enrolment and rounded figures for the earnings trigger qualifying earnings band for the tax year 2020-21. It revokes the equivalent order from last year and provides that the amounts of the qualifying earnings band should continue to be aligned with the national insurance contributions lower and upper earnings limits for the tax year 2020-21, which have been set at £6,240 and £50,000 respectively. The automatic enrolment earnings figure should remain at £10,000.

Auto-enrolment was introduced following Adair Turner’s 2006 review, commissioned by the then Labour Government, to ensure that people who were not adequately covered or who had no cover at all were able to have better workplace pension provision than before. Since auto-enrolment started in 2012 more than 10.2 million workers have been enrolled in the pension scheme, with 1.6 million employers having met their duties.

Auto-enrolment has been a huge success, with 77% of UK employees now members of their workplace pension scheme—an increase from 47% in 2012. Much more still needs to be done, with an estimated 5 million workers who are self-employed or who work in the gig economy not qualifying for auto-enrolment, and only 15% of self-employed people contributing to a pension scheme in 2017-18—a figure that has decreased from 27% in the late 2000s. That is a worrying trend. As the world of work changes, auto-enrolment needs to change too, and although that is not an issue for this debate I ask the Minister to take note in future. That said, we are happy to support the draft order.