The Private Members’ Bill aimed at expanding the auto-enrolment (AE)regime has successfully passed through parliament and received Royal Assent on 18 September 2023. The Pensions (Extension of Automatic Enrolment) Act 2023 (the 2023 Act) seeks to abolish the lower earnings limit for contributions (which is currently £6,240 per annum) and reduce the age for being automatically enrolled into a pension scheme from 22 years to 18 years old.

The 2023 Act will not automatically lead to the above changes, but what it will do is provide the Secretary of State with the authority to make regulations to carry out these changes.

To read more about why the AE changes were being considered, read our previous blog.

The Bill was introduced in the House of Commons by backbench MP Jonathan Gullis and taken through the House of Lords by Baroness Altmann. It was originally proposed in 2017 following a review of AE by the Department for Work and Pensions (DWP).

Secretary of State for Work and Pensions, Mel Stride, has said that the 2023 Act, once regulations are in place, will “mean millions across the country can save more and save earlier – boosting security in older age and helping people achieve the retirements they’ve worked so hard for”.

Minister for Pensions, Laura Trott, has said that the Bill receiving Royal Assent will mean that “younger workers and those in lower paid employment will be able to fully participate in Automatic Enrolment. For the first time, every eligible worker will benefit from an employer contribution from the first pound earned – which will make a huge difference to their eventual pension”.

A consultation is expected to be launched at some point by the DWP looking at the implementation of these new measures. Whilst the exact timeline is unclear, Viscount Younger of Leckie has stated that these measures will be implemented “…at the earliest opportunity”, and that it is hoped this will be “…later this year”.