Automatic Enrolment – 2027-28 Tax Year Update

Automatic enrolment (AE) means employers are mandated to enrol all eligible workers into a qualifying workplace pension.  The earnings trigger indicates which employees meet the earnings threshold for automatic enrolment, and the qualifying earnings bands, (the lower and upper limits) indicate the levels between which contributions are calculated. 

Currently, total pension contributions must be at least 8% of employees’ qualifying earnings.  Employers must pay at least 3% of qualifying earnings.

Section 14 of the Pensions Act 2008 requires the Secretary of State to review the automatic enrolment earnings trigger and qualifying bands each tax year. This is an update on the latest review.

Currently, the Pensions Commission is undertaking a wider assessment of the UK’s pension system.  Its review will consider retirement adequacy and the barriers preventing people from saving enough for later life, based on known data and other evidence. The final report on this third review is expected early next year.

The government believes that, during the period of this wider pension review by the Pensions Commission, it is important to provide stability, and therefore the Secretary of State has decided to retain the earnings trigger at £10,000 for the 2027-28 tax year.

The earnings trigger and the lower and upper limits are collectively known as the automatic enrolment earning thresholds.  Here are the details of next year’s figures:

As our earnings continue to grow, the £10,000 trigger is estimated to bring private sector pension participation to 17.4 million (gov.uk data) which is an increase of 48,000 compared with the 2026-27 tax year.

At the same time as reviewing the trigger amount the Secretary of State also reviewed the qualifying earnings bands – both the lower and upper earnings limits.

The Secretary of State has decided to leave the Lower Earnings Limit at £6,240 for the 2027-28 tax year. This means that earnings over £120 per week (£520 per month) up to the upper limit of £967 per week (4,189 per month) will be subject to pension contributions.

This decision ensures that everyone who is automatically enrolled continues to pay contributions on a worthwhile proportion of their income.  As the DWP states, “It is consistent with the government’s ambitions to improve financial resilience for retirement, in particular among low and moderate earners”.

To maintain the automatic enrolment aim of supporting low and moderate earners, the Upper Earnings Limit for pensions has also been frozen.  This will remain at £50,270 (£4,189 per month) for the 2027-28 tax year.  The government maintains this cap on the basis that higher earners usually have access to personal pension schemes and are likely to make separate arrangements for additional retirement savings.