Automatic enrolment into workplace pension schemes will only apply when a person earns more than £7,475 per year, a government review has concluded.
The earnings band, in line with the income tax threshold set to be introduced next April, is considerably higher than the previously proposed level of £5,035.
Every UK business, regardless of its size, should be made to offer a company pension scheme, the Department for Work and Pensions (DWP) also concludes.
It says employers should be given a 13-week grace period before staff are automatically enrolled, to ease the burden on companies employing large numbers of temporary workers.
The report concludes the change will see some ten million people automatically enrolled, and estimates anything between four and eight million will stay in the scheme.
The changes come into force in 2012.
Maggie Craig, the ABI's acting director general, says: "This is good news for millions of people.
"We are very pleased there will be no delay to the introduction of automatic enrolment into workplace pensions in 2012 and the setting up of NEST.
"We think it is right to raise the income threshold someone has to earn before being automatically enrolled, although we would have preferred a higher level of £10,000 to make sure more people clearly benefit from saving."
However, pensions minister Steve Webb has admitted hundreds of thousands of women would be excluded from NEST as a result of the threshold being raised.
He said a threshold of £7,000 would penalise 500,000 women, while some one million women would be affected if it was set at £8,000.
A threshold of £11,000 would exclude up to two million women, or just under 15% of all working women in the UK, he added.
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