Workplace Pension Auto-Enrolment
Under the Pensions Act 2008, employers must automatically enrol eligible workers (aged 22 to state pension age, earning £10,000+) into a qualifying workplace pension. Minimum total contributions are 8% of qualifying earnings (3% employer, 5% employee).
Last updated: February 2025
8% of qualifying earnings
Total minimum contribution
3%
Employer minimum
£10,000/year
Earnings trigger
What the Law Says
The Pensions Act 2008 (as amended by the Pensions Act 2014) requires all employers to provide a workplace pension. Eligible jobholders must be automatically enrolled. The employer must make minimum contributions and cannot encourage employees to opt out. The Pensions Regulator enforces compliance with powers to issue compliance notices and penalty notices.
Your Obligations as an Employer
- Automatically enrol eligible jobholders into a qualifying pension scheme
- Contribute at least 3% of qualifying earnings
- Process opt-outs correctly and re-enrol every 3 years
- Maintain records and submit declarations of compliance to TPR
What to Include in Contracts
Include details of the pension scheme, contribution rates (employer and employee), the automatic enrolment process, opt-out rights, and the 3-yearly re-enrolment obligation.
View related contract templateCommon Mistakes
- Not re-enrolling opted-out employees every 3 years
- Encouraging or incentivising employees to opt out
- Failing to enrol eligible workers within the postponement period
FAQ
Can employees opt out of auto-enrolment?
Yes, employees can opt out within one month of being enrolled. If they opt out, contributions are refunded. However, employers must re-enrol them every 3 years (on the re-enrolment date) if they remain eligible. Employers must not encourage opting out.
What are qualifying earnings for pension contributions?
Qualifying earnings are gross earnings between £6,240 and £50,270 per year (2025/26 figures). This includes salary, wages, commission, bonuses, overtime, statutory sick pay, and statutory maternity/paternity/adoption pay. Earnings below the lower threshold and above the upper threshold are excluded.
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Get Started FreeThis is guidance for UK employers, not legal advice. For complex employment law matters, consult a qualified employment solicitor or ACAS.
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