Government legislates on auto-enrolment changes

The government has published its Pensions Bill today, covering proposed changes to auto-enrolment.

The Bill will implement measures in the Making automatic enrolment work review and the command paper A sustainable State Pension: when the State Pension age will increase to 66.

The Bill increases the minimum threshold for auto-enrolment from the planned £5,000 a year to £7,500.

It builds on reforms set out in the Pensions Act 2008 and Pensions Act 2007.

Other measures in the bill include:

• Aligning the earnings threshold for automatic enrolment with the personal allowance for income tax
• Introducing an optional waiting period of up to three months before employees need to be automatically enrolled
• Simplifying the process for employers to certify their money purchase schemes meet requirements for automatic enrolment
• Providing greater flexibility for employers regarding re-enrolment dates
• Bringing forward the increase in State Pension age to 66 by 2020 and bringing women's State Pension age in line with men's to 65 by 2018
• Allow contributions to be taken towards the cost of providing personal pension benefits to current judicial pensions scheme members

Pensions minister Steve Webb says: "This Bill will radically transform the pensions landscape in this country.

"Millions of people, who currently have little or nothing put by for their retirement will, from 2012, find themselves enrolled in a workplace pension - setting them on the road to a more secure future."

In response to the change in the earnings threshold for auto-enrolment, Labour pensions spokeswoman Rachel Reeves says: "While we welcome the commitment to continue with auto-enrolment to the same timescale as that set out under Labour, we are concerned about watering-down that will mean a reduction in the number of people that are eligible for the scheme."