The Government has confirmed that it will support changes to the law to broaden the scope of auto-enrolment. 

Workers will be enrolled at 18 rather than 22 and the Government will be able to lower or remove the lower threshold on qualifying earnings.

This means that:

• more workers will be brought into the scope of auto-enrolment laws; and
• contributions may be payable on all earnings rather than just on the band of earnings known as qualifying earnings.

At the moment, the bill that is going through parliament just gives the Government the power to make these changes by separate regulations but it is not yet clear when these changes will come into force or precisely what form these will take.

What it is likely to mean is that:

• younger workers will be eligible for auto-enrolment;
• lower earners will be eligible for auto-enrolment - which in practice means those who are working part-time on lower earnings will qualify; and
• contributions may be payable on a greater proportion of earnings for all staff - which could be all earnings rather than just the band of earnings known as qualifying earnings.

Although the timing isn't clear, employers will need to be budgeting for higher contributions in the future - both in terms of more workers becoming eligible for contributions and higher contributions as these become payable on a greater proportion of earnings.  

The big unknown is how many lower earners this will benefit. With the current pressure on the cost of living, a much higher proportion of lower earners may opt out of auto-enrolment because they can't afford the employee contributions. On average opt outs run at about 10% but anecdotal evidence suggests that opting out of pension saving has increased as a result of the cost of living crisis.