Personal allowance increase could impact auto-enrolment

Budget 2013: The increase in the personal allowance to £10,000 a year could mean fewer employees are auto-enrolled into a workplace pension scheme.

The increase, announced by Chancellor George Osborne in the 2013 Budget, will take effect from 2014/15.

But Zoe Lynch, a partner at law firm Sackers, said: “The numbers being automatically enrolled will drop from previously given estimates. [The increased personal allowance] is obviously good news for most, because it means a reduction in tax bills but [because] one of the triggers for an employer to automatically enrol a worker into pension saving is currently linked to this allowance, it will have the knock-on effect of excluding nearly as many people as it helps from access to pension provision.”