Automatic enrolment

Automatic enrolment was introduced in 2012 and it mandates all employers to enrol their employees into a workplace pension. The initiative requires employers and employees to make contributions and it has resulted in millions of workers being able to boost their savings for retirement.

Automatic enrolment eligibility

If you are aged between 22 and the State Pension age, and earn at least £10,000 per year, your employer will automatically enrol you into a pension scheme and make contributions to your pension every payday. This provides a hassle-free way to save for retirement and build a more secure financial future.

Currently, the minimum automatic enrolment contribution rate is 8%, with employees contributing 5% of their qualifying earnings and employers 3%. The minimum contribution applies to earnings from £6240 to £50,270.

You can opt out of automatic enrolment, but this means you will not be saving into your workplace pension scheme and will be missing out on both the money from your employer contributions and the tax relief from the government.

Automatic enrolment does not currently apply to self-employed individuals, younger and older workers, workers on lower incomes, and multiple job holders. If you fall into one of these groups, you may wish to consider setting up a personal pension to save for your retirement.

FAQs

What counts as qualifying earnings?

Qualifying earnings includes salary, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay, and statutory adoption pay.

Can I opt-out of automatic enrolment?

Yes, you are able to opt-out of automatic enrolment. This will result in you not benefiting from employer contributions and tax benefits. Your employer will re-enrol you into the pension scheme every three years should you remain eligible for automatic enrolment.

Are temporary staff eligible for automatic enrolment?

Yes, all employees aged between 22 and the state pension age, earning over £192 per week or £833 per month, must be enrolled in a pension scheme with mandatory employer contributions.

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Automatic enrolment

Automatic enrolment eligibility

FAQs

What counts as qualifying earnings?

Can I opt-out of automatic enrolment?

Are temporary staff eligible for automatic enrolment?

Benefits of a pension

Are you a gone-away?

Automatic enrolment