Welcome to our guide to pension auto-enrolment. Here, you can learn exactly what it is, how it works, and how expert advice can help you make the most of your workplace pension.
If you're employed in the UK, you've almost certainly been 'auto-enrolled' into a workplace pension. This government initiative has changed the retirement savings landscape, but it also raises a lot of questions. Is the minimum contribution enough? What are you invested in? And what happens when you change jobs?
Here, we answer these questions and many more around this topic.
What is pension auto-enrolment?
Pension auto-enrolment is a UK government requirement that mandates all employers to automatically sign their eligible staff up for a workplace pension. You don't have to do anything to join.
The scheme was introduced to help more people save for their retirement. The idea is that by making saving the default option, individuals will build up a pension pot that, alongside the State Pension, can provide a better standard of living in later life.
Your employer must enrol you into their chosen pension scheme and both you and your employer must contribute to it.
How does auto-enrolment work?
The process is straightforward. Once you start a new job (or become eligible in your current one), your employer will automatically enrol you into their workplace pension scheme.
A portion of your pay is then deducted and paid into your pension pot each payday. Your employer also adds their own contribution.
How much is contributed?
Under auto-enrolment, there is a legal minimum total contribution of 8% of your 'qualifying earnings'. This is not 8% of your total salary.
'Qualifying earnings' are a band of earnings set by the government each year. For the 2024/25 and 2025/26 tax years, this band is between £6,240 and £50,270.
The 8% total is typically made up of:
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3% from your employer: This is the legal minimum they must pay.
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5% from you: This is automatically deducted from your pay. This 5% also includes 1% in tax relief from the government, meaning only 4% is taken from your net pay.
Many employers choose to contribute more than the 3% minimum, but they don't have to.
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Who is eligible for auto-enrolment?
Your employer must automatically enrol you if you meet all the following criteria:
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You are classed as a 'worker'.
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You are aged between 22 and the State Pension age.
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You earn at least £10,000 per year.
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You ordinarily work in the UK.
If you don't meet these criteria, you may not be auto-enrolled, but you still have rights to join a pension.
Can you opt out or opt in?
Yes. While the enrolment is automatic, participation is not compulsory.
Opting Out
After you've been enrolled, you have a one-month 'opt-out window'. If you choose to opt out during this time, any contributions you've made will be refunded.
If you do this, you will miss out on your employer's contributions (which is effectively part of your pay package) and the government tax relief.
Even if you opt out, your employer is legally required to re-enrol you approximately every three years, at which point you would need to actively opt out again.
Opting In and Joining
If you're not automatically enrolled (for instance, if you earn less than £10,000 or are under 22), you still have rights:
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'Non-eligible jobholders' (e.g., those earning over £6,240 but under £10,000) can 'opt in'. If you do, your employer must contribute to your pension.
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'Entitled workers' (e.g., those earning less than £6,240) can ask to 'join'. However, your employer is not required to contribute.
An independent adviser can help you decide if opting in is the right financial decision for your circumstances.
How our independent advisers can help with auto-enrolment
Being enrolled in a pension is an excellent start, but it's often just the first step. The default auto-enrolment scheme and contribution levels may not be enough to achieve the retirement you want.
An independent pension adviser looks at your auto-enrolment pot as one part of your entire financial picture. They can provide tailored guidance to ensure your savings are working as hard as you are.
Here are some of the ways our expert advisers can help:
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Reviewing your workplace scheme: They can analyse the performance, fees, and investment funds within your auto-enrolment pension to see if it's suitable for your goals and risk tolerance.
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Assessing your contributions: The 8% minimum is unlikely to be enough for a comfortable retirement. An adviser can calculate how much you should be saving and help you find a contribution level you can afford.
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Consolidating old pensions: Changing jobs often means leaving a trail of small pension pots behind. An adviser can help you trace these old pensions and assess whether consolidating them into one, easier-to-manage plan is the right move.
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Building a holistic retirement plan: Your workplace pension needs to work alongside your other savings, such as ISAs, personal pensions, and other investments. An adviser will create a complete retirement plan tailored to your target retirement age and income goals.
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Advising on job changes: If you're moving jobs, an adviser can explain the implications for your pension and help you decide what to do with your old pot.
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Helping with complex situations: If you're a company director or self-employed, you aren't covered by auto-enrolment. Our advisers are experts in setting up tax-efficient pensions, like a SIPP (Self-Invested Personal Pension) or a director's pension, to ensure you're saving for your future too.
Get started here to take advantage of a free pension review and a free, no-obligation chat with an independent financial adviser who specialises in auto-enrolment pensions.
FAQs
When you leave your job, the pension pot you've built remains yours. You will no longer pay into it, and your old employer will stop contributing. It will stay invested until you can access it (currently from age 55, rising to 57 in 2028). You will then be auto-enrolled into your new employer's scheme, starting a new pot. An adviser can help you decide whether to leave the old pot where it is or transfer it to your new scheme or a personal pension.