What is Pension auto-enrolment?
Pension auto-enrolment is the legal duty on UK employers to enrol eligible workers into a workplace pension scheme and contribute to it, unless the worker chooses to opt out. It applies to every employer with at least one worker who is eligible, including small businesses. The Pensions Regulator enforces it, and an employer cannot meet the duty by simply telling staff to arrange their own pension.
A worker is eligible for automatic enrolment when they are aged 22 or over and under state pension age, work in the UK, and earn above the earnings trigger. For 2026 to 2027 The Pensions Regulator lists the trigger as £10,000 a year, unchanged from the previous year. Workers who do not meet these tests are not ignored: those aged 16 to 21 or state pension age to 74 who earn above the trigger, and those earning between the lower qualifying earnings level and the trigger, can ask to join, and the employer must enrol them. Workers earning below the lower level can also ask to join a scheme, although the employer does not have to contribute.
Contributions are calculated on qualifying earnings, the band of pay between £6,240 and £50,270 a year for 2026 to 2027 according to The Pensions Regulator. The legal minimum is a total of 8% of qualifying earnings, of which at least 3% must come from the employer, and the rest is paid by the worker including tax relief. Many employers choose to base contributions on all pay, or to pay more than the minimum. The scheme must meet the quality tests set by law, and contributions are normally collected through payroll on each payday.
The employer duties do not end at enrolment. The employer must write to each worker explaining what has happened, allow a one month period in which the worker can opt out and get a refund, re-enrol eligible workers who opted out about every three years, assess workers every pay period as their age and earnings change, and tell The Pensions Regulator that it has complied (the declaration of compliance). Employers can postpone the assessment of new staff for up to three months if they have written to them. Records of contributions and decisions must be kept.
In practice
A company with its first employee reaches its staging date, chooses a qualifying scheme and connects it to payroll. An employee aged 30 earning £30,000 a year is put into the scheme from the first payday. Qualifying earnings are £30,000 minus £6,240, which is £23,760, so the minimum total is 8% of that, £1,900.80 a year, of which the employer pays at least 3%, or £712.80, and the employee pays the remaining 5%. Payroll deducts the employee's share each month and adds the employer's share to the payment sent to the scheme. Every pay period the software checks age and earnings again, so that a part-time worker who crosses the trigger in a busy month is enrolled. Once every three years the employer re-enrols those who opted out and files a fresh declaration of compliance.
Frequently asked questions
What is pension auto-enrolment?
It is the UK law requiring employers to automatically enrol eligible workers into a workplace pension and pay into it. Workers can opt out, but the employer must still enrol them.
Who has to be auto-enrolled?
Workers aged 22 or over and under state pension age who work in the UK and earn above the earnings trigger, which is £10,000 a year for 2026 to 2027 according to The Pensions Regulator.
What are the minimum auto-enrolment contributions?
The minimum is 8% of qualifying earnings in total, with at least 3% from the employer. Qualifying earnings are the pay between £6,240 and £50,270 a year in 2026 to 2027.
Does a small employer have to do auto-enrolment?
Yes. Every UK employer with an eligible worker must comply, even with a single employee, and must declare compliance to The Pensions Regulator.
How often does an employer have to re-enrol staff?
About every three years. Workers who opted out and are still eligible must be put back into the scheme, and the employer files a new declaration of compliance.