Auto-enrolment is a legal requirement under the Pensions Act 2008. Every UK employer must automatically enrol eligible workers into a qualifying workplace pension scheme and make contributions.
Who Must Be Enrolled?
Eligible jobholders must be automatically enrolled. They are workers who:
- Are aged between 22 and State Pension age
- Earn above the earnings trigger (£10,000 per year in 2024/25)
- Work in the UK
Workers outside these criteria can opt in and the employer must still make contributions.
Minimum Contribution Rates
- Total minimum contribution: 8% of qualifying earnings
- Employer minimum: 3% of qualifying earnings
- Employee minimum: 5% of qualifying earnings (can be reduced by tax relief)
Qualifying earnings are earnings between £6,240 and £50,270 per year (2024/25 figures), including salary, wages, commission, bonuses, overtime, statutory sick pay, and statutory maternity/paternity/adoption pay.
Employer Duties
- Choose a qualifying pension scheme
- Automatically enrol eligible workers within the postponement period (up to 3 months)
- Write to each worker explaining auto-enrolment
- Make correct contributions on time
- Re-enrol eligible workers who opted out approximately every 3 years
- Complete a Declaration of Compliance with The Pensions Regulator
- Keep records for 6 years
Penalties
The Pensions Regulator can issue fixed penalty notices (starting at £400) and escalating daily penalties (up to £10,000/day for large employers) for non-compliance.
Our payroll administration service handles auto-enrolment for you. Get set up.