This article contains general information about pensions and automatic enrolment for employees in the UK. For information on assigning employees to pension schemes, see Pension membership.
Types of pension enrolment
Automatic enrolment
This is a UK workplace pension scheme where eligible employees are automatically enrolled into a pension plan by their employer, with both making contributions. To be eligible, employees must be:
Aged between 22 and state pension age.
Earning more than £10,000/year (for the 2024/2025 tax year).
Working in the UK.
If an employee doesn't meet all this criteria, they can still OPT IN to the pension, but employers may not be required to contribute.
Employer requirements | Employee requirements |
|---|---|
The total pension contribution must be at least 8%, of which the employer must contribute at least 3% of the employee's salary. | The total pension contribution must be at least 8%. If the employer contributes less than 8%, the employee is required to contribute the difference (or more if they choose). |
Must assess all staff for eligibility and enrol all eligible members. | May opt-out and receive a refund for any contributions made. |
Must register with the Pensions Regulator and keep employees informed. | Can opt-in again. However, the employer is only obliged to accepted one opt-in request every 12 month period. |
Must re-enrol employees every three years. |
For more information, see Analysis of Automatic Enrolment saving levels - GOV.UK.
Voluntary enrolment in a choice of pension schemes
Some employers also offer pension scheme choices beyond their automatic enrolment obligations. An employee may not be contractually required to join, but can choose to enrol, and may have options around contribution levels or scheme type. This is distinct from the statutory opt-in process for non-eligible jobholders: it reflects an employer's own pension offering rather than a regulatory requirement. Where an employer offers multiple schemes, an employee may be able to select the one that suits them.
Contractual enrolment
This pension arrangement is common in the public sector, including education and healthcare, where membership of an occupational pension scheme forms part of the employee's contract from day one.
Worker statuses and other useful terminology
Eligible Jobholder:
Age: 22 to state pension age.
Must earn more than £10,000/year.
Must be automatically enrolled into a qualifying pension scheme.
Employer must contribute.
Non-eligible Jobholder:
Age: Either 16 to 21 or state pension age to 74 earning above £10,000
OR
Age: 16–74 earning between £6,240 and £10,000/year.
Not automatically enrolled, but can opt in.
Employer must contribute if they opt in.
Entitled Worker:
Age: 16–74
Earning less than £6,240/year
Can join a pension scheme, but employer does not have to contribute.
Qualifying earnings: Band of earnings used to calculate minimum contributions (currently £6,240–£50,270/year).
Opt-in: When a non-eligible jobholder asks to join and gets employer contributions.
Opt-out: When an automatically enrolled worker chooses to leave the scheme.
Excluding from automatic enrolment
You should only exclude an employee from automatic enrolment if they meet one of the following criteria:
The employee is a director without an employment contract
The employee is a limited liability partner and not treated by HMRC as a salaried member
The employer has reached their maximum annual contribution
The user works overseas (even if they're paid through UK payroll).
The employee is working a notice period. They can still choose to opt-in.
The employee previously received a winding-up lump sum and has been re-employed.
Remember: If you exclude a user from automatic enrolment, you must still re-assess them for automatic enrolment every three years.