With the cost of living rising at its fastest for several decades, there was big pressure on the Chancellor to give hard-pressed households some good news in his Spring Budget announcement.
In the event, he had relatively little to offer pension savers and retired people. The auto enrolment trigger, the qualifying earnings band and the lifetime allowance are all unchanged. Here’s a quick rundown.
The qualifying earnings band will stay at £6,240
This is the level from which you must start to calculate contributions to workplace pensions. For 2022–2023, the lower limit of the qualifying earnings band will again be £6,240. In other words, below this threshold an employee’s earnings don’t count towards auto enrolment contributions, assuming if you use qualifying earnings as the basis of your contribution calculations.
This is also known as pensionable earnings and it’s calculated like this:
Income – lower limit of the qualifying earnings band = pensionable earnings.
So, if an individual earns £20,000 a year, the amount their employer would calculate their qualifying earnings on would be £13,760. (£20,000 – £6,240 = £13,760).
There is a maximum limit to pensionable earnings too. This is also unchanged at £50,270 – so anything you earn above this amount doesn’t count when calculating your pensionable earnings.
We’ve broken down the bands for each pay period below:
| 2022-2023 | Whole year | Half year | Quarter | One month | Four weeks | Two weeks | One week |
| Lower level of qualifying earnings | £6,240 | £3,210 | £1,560 | £520 | £480 | £240 | £120 |
| Upper level of qualifying earnings | £50,270 | £25,135 | £12,568 | £4,189 | £3,867 | £1,934 | £967 |
The lifetime allowance will stay at £1,073,100
The lifetime allowance is the total amount of pension savings you can take when you retire before you have to pay extra tax.
It applies to the money in all workplace pensions, including our Scheme, and any personal pensions. It doesn’t include the State Pension.
The lifetime allowance is £1,073,100 and will be frozen until 2026.
The auto enrolment trigger will stay at £10,000
In the 2022–2023 tax year the amount someone has to earn to be automatically enrolled into a workplace pension will still be £10,000 a year.
Inflation and earnings are rising, so more people are likely to reach this £10,000 a year salary. The government says that 17,000 people will be brought into auto-enrolment who would have been excluded if the minimum salary requirement had gone up.
We’ve broken down the amounts for each pay period below:
| 2022-2023 | Whole year | Half year | Quarter | One month | Four weeks | Two weeks | One week |
| Minimum salary to be auto-enrolled | £10,000 | £4,998 | £2,499 | £833 | £768 | £384 | £192 |
Millions of women aren’t saving enough for retirement
Three million women, particularly single mothers, are locked out of workplace pensions. We don’t think keeping the minimum salary to be auto enrolled at £10,000 does enough to help them.
Single mothers bear responsibility for earning and for childcare, so many can only work part-time. And since part-time work means part-time pay, many don’t make the £10,000 they need to be automatically enrolled. The average pension pot for single mothers has dropped by 40% since the start of the pandemic to just £11,000.
As low earners, single mothers working part-time are disproportionately affected by the rising cost of living. The Chancellor’s commitment to higher income tax and National Insurance thresholds is welcome, but more needs to be done.
That’s why we’re lobbying the government to remove the £10,000 earnings trigger and to start pension contributions from the very first pound of earnings. This would bring an additional 200,000 single mothers into workplace pension saving and improve their income in retirement by as much as 140%.
Pension guidance
This information doesn’t constitute financial or professional advice and is general in nature. For free and impartial guidance about your pension savings, please visit or call:
- Pension Wise (0800 138 3944) to book a phone or face-to-face appointment.
- Citizens Advice Bureau (CAB) (03444 111 445) for a face-to-face appointment.
- Pension Advisory Service (0300 011 3797).
These services offer free information, but not advice.
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