Webb reveals up to 1m people to be exempt from workplace pension

Also, as first revealed in Pensions Week , employers will have a period of grace before it is compulsory to enrol new starters and all businesses will be included in the reforms .  

Speaking at a conference at the Nest head offices, pensions minister Steve Webb (pictured) outlined the earnings’ threshold of automatic enrolment will be aligned with personal allowance for income tax. The scheme would have an introductory period of three months and Webb stressed micro business would not be excluded.

On the three-month introductory period, he said: “We do not want to force the employer to mess around with schemes.”

He added the optional period allowed for casual or seasonal workers to leave companies without unnecessary administration.

Between the National Insurance limit, £5,000 and the proposed PAYE limit in April 2011 of £7,475, the employer will contribute.

Above this amount, the minister confirmed, the employee will be expected to contribute.

A Nest iPad app and android app will be launched to target a new demographic.

Webb said: “This will reach a section of the market that have never been reached before – 22 year olds who will be saving in to a pension for the first time.”

Rachel Reeves, shadow pensions minister, broadly agreed with the announcement.

But Reeves countered: “I remain concerned that the increase in the qualifying earnings level, and the introduction of a 3-month waiting period chips away at the goal of increasing pension provision to those that need it the most.  

“On top of last weeks’ news of the accelerated increase of state pension age to 66 by 2020 for women as well as men, women are once again amongst those that will lose the most under this government’s manipulation of Labour’s pension reform plans.”