This sees employees auto-enrolled into a workplace pension scheme that includes a contribution from their employer, with the initiative to be more widespread from 2013.
An initial threshold of £8,105 was set by the government to ensure people earning less than this in a year were not automatically opted into a pension.
Chancellor George Osborne announced in his recent autumn statement that the personal allowance would increase to £9,440 from April 2013.
As such, the Department for Work and Pensions (DWP) has confirmed the threshold for auto-enrolment will be brought in line with this allowance from the beginning of the next tax year.
Although the increase in personal allowance should make it easier for low earners to budget and save, the Trades Union Congress (TUC) has expressed disappointment at the decision to raise the threshold for auto-enrolment too.
Figures from the TUC have suggested 420,000 low paid earners will be excluded from saving into a workplace pension as a result of the change.
General secretary of the organisation Brendan Barber said: "Excluding more and more people from auto-enrolment is undermining plans to improve people's retirement income."
However, a spokesman for the DWP stressed that low earners would still be able to choose to opt into a workplace pension if they wish and receive an employer contribution.
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