Quick Answer: What Are My Auto-Enrolment Duties?
You must automatically enrol all eligible jobholders (aged 22 to state pension age, earning over £10,000 per year) into a qualifying workplace pension scheme. Minimum contributions are 3% employer and 5% employee (8% total) on qualifying earnings between £6,240 and £50,270 (2025/26 thresholds).
| Worker Category | Age | Earnings | Auto-Enrol? | Employer Contribution |
|---|---|---|---|---|
| Eligible jobholder | 22 to SPA | Over £10,000/year | Yes -- mandatory | Minimum 3% |
| Non-eligible jobholder | 16-21 or SPA-74 | Over £6,240/year | No -- but they can opt in | Minimum 3% if they opt in |
| Entitled worker | 16-74 | Under £6,240/year | No -- but they can join | No employer contribution required |
Understanding the Contribution Rates
Current Minimum Contributions (2025/26)
| Element | Minimum Rate | Based On |
|---|---|---|
| Employer contribution | 3% | Qualifying earnings |
| Employee contribution | 5% (including tax relief) | Qualifying earnings |
| Total minimum | 8% | Qualifying earnings |
Qualifying Earnings (2025/26)
Contributions are calculated on qualifying earnings -- the band of earnings between the lower and upper thresholds:
| Threshold | Annual | Monthly | Weekly |
|---|---|---|---|
| Lower earnings threshold | £6,240 | £520 | £120 |
| Upper earnings threshold | £50,270 | £4,189 | £967 |
Example: An employee earning £30,000 per year has qualifying earnings of £30,000 - £6,240 = £23,760. Minimum employer contribution: £23,760 x 3% = £712.80 per year (£59.40 per month).
Alternative Certification Methods
Some employers prefer to calculate contributions differently. The Pensions Regulator allows three alternative sets of requirements:
| Set | Pensionable Pay | Minimum Total | Minimum Employer |
|---|---|---|---|
| Set 1 | Basic pay | 9% | 4% |
| Set 2 | Total pay (including overtime, bonuses) | 8% | 3% |
| Set 3 | Total pay above the lower threshold | 7% | 3% (some restrictions) |
Step-by-Step: Setting Up Auto-Enrolment
1. Know Your Duties Start Date
- New employers: Your duties begin when you first employ someone
- Existing employers: You should already be compliant (auto-enrolment was fully phased in by February 2018)
2. Choose a Pension Scheme
Your scheme must be a qualifying scheme, meaning it meets the minimum requirements. Options include:
- NEST (National Employment Savings Trust) -- the government-backed scheme that must accept all employers
- The People's Pension -- a popular multi-employer scheme
- NOW: Pensions -- another large auto-enrolment provider
- Smart Pension -- technology-focused provider
- Group personal pension -- offered by insurance companies
- Your own trust-based scheme -- for larger employers
NEST is the default option for employers who cannot find another provider, as it has a legal obligation to accept all employers.
3. Assess Your Workforce
On your staging date (or when a new employee joins), you must assess each worker and categorise them as an eligible jobholder, non-eligible jobholder, or entitled worker.
4. Enrol Eligible Jobholders
- Enrol them into the scheme automatically -- you do not need their consent
- Provide them with enrolment information within 6 weeks
- Start deducting and paying contributions from the enrolment date
5. Write to All Workers
You must write to every worker explaining:
- Eligible jobholders: That they have been enrolled, what the scheme is, contribution rates, and their right to opt out
- Non-eligible jobholders: Their right to opt in to the scheme
- Entitled workers: Their right to join a pension scheme (employer contribution not required)
Handling Opt-Outs
Employees have the right to opt out of the pension scheme, but there are strict rules:
| Opt-Out Rule | Detail |
|---|---|
| Opt-out window | 1 calendar month from enrolment (or from receiving enrolment information, if later) |
| Refund | Employee contributions must be refunded in full if they opt out within the window |
| Employer inducement | It is a criminal offence to encourage or induce an employee to opt out |
| Re-enrolment | You must re-enrol opt-outs every 3 years on your re-enrolment date |
What You Must Not Do
- Do not suggest, encourage, or pressure anyone to opt out
- Do not provide opt-out forms proactively (direct them to the pension provider)
- Do not offer higher pay in exchange for opting out
- Do not make opt-out a condition of employment
- These are criminal offences carrying unlimited fines
Re-Enrolment
Every 3 years, you must re-enrol any eligible jobholders who previously opted out or left the scheme. This is called cyclical re-enrolment.
- Your re-enrolment date is the 3rd anniversary of your staging date (and every 3 years after)
- You have a 6-month window (3 months before to 3 months after) to choose your re-enrolment date
- You must assess all workers again at the chosen date
- Re-enrolled workers can opt out again, and the cycle continues
Record Keeping and Compliance
Records You Must Keep
| Record | Retention Period |
|---|---|
| Names and addresses of enrolled workers | 6 years |
| Opt-out notices | 4 years |
| Contributions paid | 6 years |
| Enrolment and re-enrolment dates | 6 years |
| Pension scheme reference/membership numbers | 6 years |
Declaration of Compliance
You must complete a declaration of compliance with The Pensions Regulator within 5 months of your duties start date. This confirms you have met your auto-enrolment obligations.
Penalties for Non-Compliance
The Pensions Regulator has significant enforcement powers:
| Penalty | Trigger |
|---|---|
| Fixed penalty notice | £400 for failing to comply with a compliance notice |
| Escalating daily penalty | £50-£10,000 per day (depending on employer size) |
| Criminal prosecution | For inducing opt-outs or repeated serious non-compliance |
| Prohibited recruitment conduct | Criminal offence to make pension opt-out a condition of a job offer |
Common Employer Mistakes
- Not enrolling workers from day one -- eligible jobholders must be enrolled from their first day of qualifying earnings
- Using the wrong earnings threshold -- thresholds change each April
- Failing to re-enrol opted-out workers every 3 years
- Paying contributions late -- contributions must reach the pension provider by the 22nd of the month following deduction (or 19th if paying by cheque)
- Not completing the declaration of compliance -- this must be done even if you have no eligible workers
- Encouraging opt-outs -- this is a criminal offence, even informally
Using Grove to Manage Auto-Enrolment
Grove tracks employee eligibility automatically, flags when workers become eligible for enrolment, and reminds you of your re-enrolment dates. Integrate with your payroll to ensure contributions are calculated and paid correctly every month.
Get started with Grove and simplify your workplace pension administration.
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Rachel Richardson
Head of Growth & Marketing, Grove HR
Rachel leads growth and marketing at Grove HR, with over a decade of experience in UK HR technology. She writes practical guides to help small businesses navigate employment law and build better workplaces.
Frequently Asked Questions
Do I have to offer a workplace pension if I only have one employee?
Yes. Auto-enrolment applies to all employers regardless of size. If your one employee is an eligible jobholder (aged 22 to state pension age, earning over £10,000 per year), you must automatically enrol them and pay minimum employer contributions of 3%.
What if my employee does not want to be in the pension scheme?
You must still enrol them automatically. They then have a 1-month opt-out window during which they can choose to leave the scheme and receive a full refund of their contributions. You must not encourage or suggest that they opt out. After 3 years, you must re-enrol them again.
Can I offer more than the minimum contributions?
Yes, and many employers do. Enhanced employer contributions are a valuable recruitment and retention tool. You can contribute any amount above the 3% minimum. Some employers match employee contributions up to a certain level (e.g., employer matches up to 5% if the employee also contributes 5%).
When do contributions have to be paid to the pension provider?
Contributions must reach the pension provider by the 22nd of the month following the month in which they were deducted from the employee pay (or by the 19th if paying by cheque). Late payment is a compliance failure that The Pensions Regulator monitors.
What is NEST and do I have to use it?
NEST (National Employment Savings Trust) is the government-backed workplace pension scheme. You do not have to use NEST -- you can choose any qualifying pension scheme. However, NEST has a legal duty to accept all employers, making it the default option if you cannot find or are rejected by another provider.
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