Pension auto-enrolment duties for UK employers
What every UK employer must do to meet pension auto-enrolment obligations under the Pensions Regulator.
Since the Pensions Act 2008 came into force, every UK employer has a legal duty to automatically enrol eligible workers into a qualifying workplace pension scheme. Pension auto-enrolment is policed by The Pensions Regulator (TPR), and non-compliance penalties start at £400 fixed and escalate to £10,000 a day for large employers. This guide covers the categories of worker, the contribution minimums, and the declarations TPR expects.
Auto-enrolment sits at the centre of your pensions and insurance duties as an employer. If you are new to the topic, our guide to what a workplace pension is explains the underlying scheme that auto-enrolment populates.
Who must be enrolled
Workers fall into three categories based on age and earnings.
| Category | Age | Earnings test | Action |
|---|---|---|---|
| Eligible jobholder | 22 to State Pension age | > £10,000 / year | Auto-enrol, employer contributes |
| Non-eligible jobholder | 16-21 or SPA-74, or earnings £6,240-£10,000 | n/a | Can opt in; employer contributes |
| Entitled worker | 16-74, earnings <= £6,240 | n/a | Can opt in; employer not required to contribute |
The earnings test is applied at each pay reference period, not annually. Someone who earns £900 in one month is an eligible jobholder for that month even if their annual pay is far lower.
Minimum contributions
| Source | Minimum % of qualifying earnings |
|---|---|
| Employer | 3% |
| Employee | 5% (4% net + 1% tax relief) |
| Total | 8% |
Qualifying earnings are pay between £6,240 and £50,270 in 2024-25 (the lower and upper earnings limits for NIC). You can use a higher base such as basic pay or total pay; if you do, alternative thresholds apply under the certification rules.
The first-day routine
When a new worker joins:
- Assess them on their first pay date
- Enrol eligible jobholders into the scheme within six weeks
- Issue a statutory letter within six weeks of enrolment
- Allow opt-out within one month for a full refund
- Run the contributions through the next payroll
You may postpone assessment for up to three months from the worker’s start date. This avoids enrolling short-term temps who would leave before the first contribution.
Re-enrolment every three years
Approximately every three years you must:
- Choose a re-enrolment date within a six-month window
- Re-assess all workers who previously opted out
- Re-enrol those who are again eligible jobholders
- Submit a Re-declaration of Compliance to TPR within five months
Failure to re-declare results in fixed penalties even if you have no eligible workers. The cyclical re-enrolment process has its own rules and a separate filing deadline, so it is worth reading our dedicated guide to pension auto re-enrolment before your three-year date falls due.
Choosing a scheme
Most small employers use one of the master trusts:
- NEST (the government-backed default)
- The People’s Pension
- Smart Pension
- Aviva Workplace Pension
- Now: Pensions
Compare on contribution methods (relief at source vs net pay), default investment fund performance, employer charges and integration with your payroll. See our existing auto-enrolment pension page for the underlying mechanics.
Penalties for non-compliance
| Trigger | Penalty |
|---|---|
| Failure to comply notice ignored | £400 fixed |
| Daily escalating penalty (1-4 employees) | £50/day |
| Daily escalating penalty (5-49 employees) | £500/day |
| Daily escalating penalty (50-249 employees) | £2,500/day |
| Daily escalating penalty (250+ employees) | £10,000/day |
| Wilful non-compliance | Criminal prosecution |
Final reminders
Auto-enrolment cuts across PAYE Real Time Information and pension contributions in your bookkeeping. Get the workflow right once and it runs itself. Remember that a workplace pension funded through auto-enrolment runs alongside the state pension, and directors who want more control over their retirement savings often combine it with a personal pension or SIPP. The Pensions Regulator guidance for employers is the authoritative source for limits and process. See pricing for payroll that talks directly to your pension provider.