Automatic enrolment – what to expect from your employer

Your employer has to enrol you into a workplace pension scheme, and to make contributions to it, if you:

• work in the UK
• are aged between 22 and State Pension age
• earn more than £10,000 a year
• aren’t already in a qualifying pension scheme.

Even if you’re not eligible for automatic enrolment, you still have the right to join a workplace pension scheme, if you ask.

And, depending on your earnings, your employer might still have to contribute to it.

Your employer can postpone automatic enrolment for up to three months for some or all employees. This is called postponement.

If your employer postpones your enrolment, they must write to you to tell you what they’re doing and how automatic enrolment applies to you. You can still ask to join the scheme during the postponement period, and your employer might also make contributions during this time, depending on your income. 

Your employer will tell you what contributions you’ll need to pay if you’re automatically enrolled or choose to opt in.

There are minimums that your employer must pay into the scheme. These depend on the definition of earnings your employer uses to base contributions on. They’ll usually deduct some of these from your earnings.

When setting up pension schemes, employers usually base contributions on ‘qualifying earnings’. This makes sure they meet their automatic enrolment duties. Each tax year, the earnings figures are reviewed. The figures for the 2023/24 tax year are earnings between £6,240 and £50,270. 

Assuming your employer uses qualifying earnings to calculate contributions, the minimum rates are as follows: 

Your employer will set the percentages you need to pay – taking into account the minimum percentages set out above. But they can set a higher level – you’ll need to check with your employer.

Your employer might use a different definition of earnings, which can result in different contribution rates. Again, you’ll need to check with your employer. 

Do you earn less than the personal allowance (£12,570 in the tax year 2023/24) – and so don’t pay tax? Then you won’t get tax relief if your employer operates a ‘net pay’ scheme.

If your workplace scheme operates under ‘relief at source’, you’ll get basic (20%) tax relief on your contributions. This is regardless of your level of pay – although higher rate taxpayers will need to claim any extra tax relief.

If you’re affected by this, you can check with your employer what type of scheme they offer and if they would be willing to change to a relief at source scheme. Be aware that your employer does have to use the same method for all employees in the scheme.

Whether this option is available depends on your individual arrangement. You’ll need to discuss this with your employer. 

If you’re able to reduce your contributions and the total contributions fall below 8% – you’ll no longer be in a qualifying automatic enrolment scheme. This will trigger the re-enrolment process.

This means your employer has to automatically re-enrol you if you’re an eligible worker. This happens approximately every three years if you’re not a member of a qualifying scheme.

If you’re being automatically enrolled, unless you want to opt out you don’t need to do anything.

Your employer will have to make at least the minimum required contributions into your pension.

You’ll usually have to pay in too – your contributions will be taken from your pay packet.

Special rules may apply to your first few months of contributions. To help manage refunds for those who ask to leave the scheme, some schemes allow employers to pay the first three months of contributions to them in one go in the fourth month. Ask your employer or scheme provider to find out if this applies to you.

If you’re not eligible for automatic enrolment, it’s up to you to decide what to do next. If you want to join a workplace pension scheme – tell your employer. They can’t refuse your request.

If you’re being automatically enrolled, the letter from your employer will explain how to opt out of the pension.

Usually, you’ll need to submit a form to do this. But some pension schemes allow you to opt out online or by phone.

Your employer will tell you who you need to contact. But they’re not allowed to handle the process for you – for example, by giving you an opt-out form.

This is to prevent employers from encouraging their workers to opt out.

If you opt out within one month of joining, your employer will refund any money you’ve paid into the pension scheme.

If you opt out later, the money will usually stay in the pension scheme until you retire.

If you opt out, your employer has to automatically enrol you into their pension scheme again every three years. This is assuming you remain eligible for automatic enrolment at that time.

Your employer can’t opt out of their automatic enrolment duties. Also, while you have the right to opt out of your workplace pension, your employer can’t:

• force or encourage you to opt out
• treat you unfavourably for not opting out.

The same principle applies during the recruitment process.

If you apply for a job, your prospective new employer can’t suggest they’re more likely to hire you if you opt out of their pension scheme.

When backdating contributions, your employer must pay all the unpaid employer contributions and you must pay yours. This is unless your employer chooses to pay them for you.  

The Pensions Regulator handles workplace pensions in the UK. They can investigate concerns if your employer isn’t following the rules or you’re missing contributions from them.

If you have concerns, it’s best to speak to your employer first. If you feel able to – try to resolve the issue with them direct.

If you’ve tried that and you’re still concerned, The Pensions Regulator has a whistleblowing service.

Learn what to do in our article What to do if my employer doesn’t pay my pension contributions or is late paying them.