Auto-Enrolment: UK Employer Duties

Auto-enrolment is a legal requirement under the Pensions Act 2008. Every UK employer must automatically enrol eligible workers into a workplace pension scheme and make contributions.

Who Must Be Enrolled?

Eligible workers are those who:

• Are aged between 22 and State Pension age
• Earn at least £10,000 per year
• Work in the UK

Category	Age	Earnings	Must Enrol?	Can Opt In?
Eligible jobholder	22 to SPA	£10,000+	Yes - automatic	N/A
Non-eligible jobholder	16-21 or SPA-74	£10,000+	No	Yes
Entitled worker	16-74	Under £6,240	No	Yes

Minimum Contribution Rates

Since April 2019, the minimum contribution rates are:

Contributor	Minimum Rate
Employer	3%
Employee	5%
Total	8%

These percentages apply to "qualifying earnings" - the band between £6,240 and £50,270 (2024-25 figures).

Qualifying Earnings Example

Employee earning £30,000 per year:

• Qualifying earnings: £30,000 - £6,240 = £23,760
• Employer contribution (3%): £712.80 per year
• Employee contribution (5%): £1,188 per year
• Total contribution: £1,900.80 per year

Key Employer Duties

1. Assess your workforce - Determine who needs to be enrolled
2. Choose a pension scheme - Must be a qualifying scheme (e.g., NEST)
3. Enrol eligible workers - Within your duties start date
4. Make contributions - Pay into the scheme on time
5. Keep records - Maintain records for 6 years
6. Re-enrol every 3 years - Re-assess opted-out workers

Postponement

You can delay enrolment for up to 3 months using "postponement". This is useful for:

• New starters on probation
• Temporary or seasonal workers
• Short-term contract workers

You must notify the worker in writing within 6 weeks of the postponement start date.

Opt-Out Rules

Workers can choose to opt out within 1 month of being enrolled. If they do:

• Refund their contributions in full
• You cannot encourage or induce anyone to opt out (this is a criminal offence)

Re-Enrolment

Every 3 years (from your staging date), you must:

• Re-assess all workers who previously opted out
• Re-enrol those who now meet the eligibility criteria
• Submit a re-declaration of compliance to The Pensions Regulator

Penalties for Non-Compliance

Company Size	Daily Penalty
1-4 workers	£50/day
5-9 workers	£100/day
10-49 workers	£500/day
50-249 workers	£1,000/day
250-499 workers	£5,000/day
500+ workers	£10,000/day

Additional penalties:

• Fixed penalty notice: £400
• Prohibited recruitment conduct: £1,000-£5,000
• Criminal prosecution: Up to £50,000 fine or 2 years imprisonment