Your guide to auto-enrolment pensions

Automatic enrolment (more commonly referred to as ’auto-enrolment’) is a Government initiative which aims to ensure all eligible employees have access to a workplace pension. A workplace pension is a pension scheme created by the employer to help workers save for their future. The employer collects pension contributions through payroll and they must contribute alongside the employees. 

Businesses must ensure they meet the auto enrolment rules.  

What is auto-enrolment? 

All UK employers must enrol eligible workers into a workplace pension and contribute towards their retirement under the auto-enrolment rules. Employees are automatically enrolled in the workplace pension scheme, where eligible. Employees can opt out of the pension scheme if they don’t want to make pension contributions, but they will also forgo the employer contribution if they do so. 

Who is eligible? 

The workers you must enrol are known as eligible jobholders. 

• Eligible Jobholders: Employees working in the UK, aged between 22 and State Pension age, earning over £10,000 per year. Employers must enrol these individuals and contribute to their pensions. 
• Workers who can ask to join are known as non-eligible jobholders or entitled workers. You must enrol both sets of workers, but are only obliged to make contributions for non-eligible workers, not entitled workers. 
• Non-Eligible Jobholders: Employees aged between 16 and 74 and earn between £6,240 and £10,000 or employees aged between 16 and 21 or between state pension age and 74 and earnings over £10,000 earning. 
• Entitled Workers: Employees earning less than £6,240 and aged between 16 and 74. 
• Temporary and seasonal workers: Employers with staff who work flexible or seasonal hours must assess these workers and enrol them in a workplace pension scheme if they become eligible. As there is no regularity to the amount they earn, the assessment is ongoing and should be carried out each time you pay them. 
• Anyone aged between 22 and state pension age, earning over £192 a week or £833 a month, must be enrolled into a pension scheme. 

What are employers’ responsibilities under auto-enrolment?

Under the Pension Act 2008, UK employers with one or more workers must meet the requirements of the legislation. These include:

• Setting up a workplace pension scheme 
• Automatically enrolling eligible employees into a workplace pension 
• Make contributions towards your employees' pensions, at least the statutory minimum contribution rates 
• Inform your employees 
• Complete The Pensions Regulator declarations 

What are employees’ rights under auto enrolment?  

 Your rights depend on which category of worker you fall into. 

Eligible Jobholders 

• employees working in the UK 
• aged between 22 and state pension age 
• earning over £10,000 per year.  

Employers must enrol Eligible Jobholders and contribute to their pensions.  

Workers who can ask to join are known as Non-Eligible Jobholders or Entitled Workers. Employers must enrol both sets of workers into the pension scheme, but are only obliged to make contributions for Non-Eligible Workers, not Entitled Workers.  

Non-Eligible Jobholders 

• employees aged between 16 and 74 and 
• earning between £6,240 and £10,000, or 
• employees aged 16 to 21 or between state pension age and 74 and  
• earnings over £10,000.  

Entitled Workers 

• employees earning less than £6,240 and  
• aged between 16 and 74.  

Temporary and seasonal workers 

Employers with staff who work flexible or seasonal hours must assess these workers and enrol them in a workplace pension scheme if they become eligible.  

If there is no regularity to the amounts they earn, the assessment should be ongoing and carried out each time you pay them.   

Don’t forget to monitor age changes too – employees under 22 will join one of the categories above when they reach their 22nd birthday. 

In short, employees aged between 22 and state pension age who earn over £192 a week or £833 a month, must be enrolled into a pension scheme. 

Opting out 

Employees have six weeks to opt out of auto enrolment from the point their employer provides them with the required information about auto-enrolment into the pension scheme. 

Re-enrolment 

Every three years, employers must re-enrol employees who have opted out of the pension scheme and the employees have the opportunity to opt out again. 

How much do employers need to contribute? 

The minimum is 8% of the employee’s qualifying earnings. Employers must pay at least 3% of this. The employee will then contribute enough to make it up to 8%. Most employees get tax relief from the Government on their contribution and this tax relief counts towards the 8%. 

Contributions are a little more complicated to work out if your employer offers a salary sacrifice pension scheme but can typically save both employees and the employer money. 

What are some common mistakes to avoid? 

• Missing deadlines – see the Pensions Regulator website for the key timelines you must meet as an employer, or speak to your accountant for advice 
• Not communicating with staff – there are crucial pieces of information you must give to employees and timings you must stick to  
• Incorrect contributions –the Pensions Regulator will not be impressed if you short-change your employees. And the employees won’t be pleased either! You’d need to make up missed contributions immediately and the Pensions Regulator could force you to make up the employees’ part of the payments too 

You could also face fines for any of these errors too. 

Auto enrolment is a significant but essential task for employers. With diligent management employers can ensure compliance and contribute to your employees’ retirement. 

How TaxAssist Accountants can help 

At TaxAssist Accountants we can manage your workplace pension scheme and help you and your business stay compliant through compliance checks, payroll support and advice on pension scheme set up. For further details about how we can help please call 01825-572-101 or use our easy online contact form. 

Last updated 20 May 2026 | First published 10 May 2024

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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