Workplace pensions & automatic enrolment

Workplace pensions are a great way to save for your retirement.

What is a workplace pension?

A workplace pension is provided by your employer as part of your employment rather than an individual standalone plan you choose yourself.

What is automatic enrolment?

Since 2018, all employers have been required by law to set up and enrol all eligible employees into a qualifying pension. Your employer will explain, in writing, exactly how automatic enrolment will affect you. In many cases, this will be done by letter, but some employers may use other methods, such as email.

When you are enrolled, you will be provided with the following information:

  • who operates the pension you are being enrolled into
  • what type of pension it is
  • the level of contributions you and your employer will pay into the pension
  • how to opt out if you don’t want to join.

When you pay into a pension, your employer will normally also make contributions as well. You will also receive tax relief on your contributions as shown below.


John pays £80 into his pension scheme each month

+  £80
His employer puts in £60 + £60
And he gets tax relief of £20* = £20.00
That means £160.00 is going into John’s pension from his £80 contribution   £160.00

*If you are a Scottish or Welsh taxpayer the tax relief you will be entitled to will be at the Scottish or Welsh Rate of income tax, which may differ from the rest of the UK.

We've based this example on automatic enrolment, where the minimum contribution is 3% from the employer, 4% from the employee and 1% in tax relief. This would be the minimum automatic enrolment contribution for someone with pensionable earnings of £24,000 each year.

Pensions are a long-term investment. The retirement benefits you receive from your pension plan will depend on a number of factors including:

  • the value of your plan when you decide to take your benefits - which isn't guaranteed as the value can go down as well as up.
  • The value of your plan could fall below the amount(s) paid in.
  • The tax treatment of your pension depends on your individual circumstances.
  • Your circumstances and tax rules may change.

Who is eligible for automatic enrolment?

An employee must work, or ordinarily work, in the UK and have a contract of employment (i.e. is an employee rather than a self-employed contractor) or be contracted to provide work and services personally (i.e. is not permitted to sub-contract their duties to a third party).

Eligible jobholders

These employees must:

  • not already be in a qualifying workplace pension
  • be at least 22 years old
  • have not yet reached State Pension age
  • earn more than a minimum amount a year known as the earnings trigger (£10,000 for tax year 2024/25).

Non-eligible jobholders

Non-eligible jobholders can opt in to the qualifying workplace pension scheme and benefit from an employer contribution. Non-eligible jobholders are those who:

  • are aged between 16 and 74
  • earn more than a minimum amount each year (£6,240 for tax year 2024/25) but less than the earnings trigger for automatic enrolment (£10,000 for tax year 2024/25)


  • are aged between 16 and 21 or between State Pension age and 74
  • earn more than the earnings trigger (£10,000 for tax year 2024/25).

Entitled workers

These are employees who:

  • earn less than £6,240 (for tax year 2024/25)
  • are aged between 16 and 74.

'Entitled workers' have a right to join a workplace pension provided by the employer but the employer can use a different scheme from the one it is using to automatically enrol its eligible and non-eligible jobholders. The employer does not have to pay into the pension for these employees.

How much will you have to contribute?

Under automatic enrolment, there is a minimum total contribution that must be paid into your pension. The amount is set by the Government and is made up of your and your employer’s contributions, as well as tax relief on your contribution.

The table below shows the minimum scheme payments made by you and your employer and is based on tax relief at source. This will work slightly differently for net pay or salary sacrifice.

The employer can increase what they pay. If they do, you may pay less. Overall scheme contributions may be higher than the minimums.

From 6 April 2019 3% 4% 1%



Opting out of your workplace pension

You can opt out within 30 days from the date your employer enrolled you into your workplace pension. Check that this is the right decision for you.

How to opt out of your workplace pension

Taking your benefits

Taking your benefits

Aged 55 or over (or aged 57 or over from April 2028)? If you’ve understood the retirement basics, then explore your pension options.

Your pension options



Once you’ve got the basics, it’s time to take a look at some of the other stages of the retirement journey.

Retirement explained



If you need to ask us a question about pensions or retirement, then get in touch. There are lots of ways to contact us.

Contact us