Pensions and Auto enrolment

Under the Pensions Act 2008, all UK employers have a legal duty to assess their workforce and provide access to a qualifying workplace pension scheme. This obligation applies regardless of the size of the business or the number of employees and is overseen by The Pensions Regulator.

Auto-enrolment is designed to ensure that eligible workers are automatically enrolled into a pension scheme, with contributions made by both the employer and the employee.

Key Employer Duties and Deadlines

There are two critical milestones employers must be aware of:

Duties Start Date
This is the date your first member of staff starts work. From this point, you are legally required to:

Assess each worker’s eligibility
Enrol eligible employees into a qualifying pension scheme
Calculate and pay pension contributions
Keep appropriate records

Contributions must be paid from the first applicable payroll period following the duties start date.

Declaration of Compliance Deadline
Employers must submit a declaration of compliance to The Pensions Regulator, confirming how they have met their legal duties. This must be completed within five months of the duties start date.

This declaration is required even if no staff are eligible for auto-enrolment.

Failure to comply can result in penalties, escalating fines, and enforcement action.

Worker Eligibility Criteria (2025–2026)

Employees are assessed each pay period and fall into one of three categories:

Eligible Jobholders
Workers are automatically enrolled if they:

Are aged 22 or over and under State Pension Age
Earn more than £10,000 per year
Work in the UK

Eligible jobholders are entitled to employer pension contributions.

Non-Eligible Jobholders
Workers who earn:

Between £6,240 and £10,000 per year, or
Are aged 16–21 or State Pension Age to 74

These workers are not automatically enrolled but can opt in and are entitled to employer contributions if they do so.

Entitled Workers
Workers who earn below £6,240 per year may request to join a pension scheme, but employers are not required to contribute.

Employers must still provide access to a scheme and process requests correctly.

Pension Contributions and Qualifying Earnings

Minimum pension contributions are calculated using qualifying earnings, which are reviewed periodically by the government.

For the 2025 and 2026 tax years, qualifying earnings are:

£6,240 to £50,270 per year

The minimum total contribution is 8% of qualifying earnings, made up of:

3% employer contribution
4% employee contribution
1% tax relief, typically added via HMRC at the basic rate

This structure remains unchanged from recent years and continues to apply unless future legislation dictates otherwise.

Ongoing Employer Responsibilities

Auto-enrolment is not a one-off task. Employers must:

Reassess staff each pay period
Manage opt-outs and refunds correctly
Re-enrol eligible staff every three years
Maintain accurate payroll and pension records
Submit contributions on time

Payroll errors, late submissions, or incorrect assessments can result in compliance breaches.

The Importance of Getting It Right

Workplace pensions sit at the intersection of payroll, HR, and compliance. Errors often arise through misunderstanding eligibility rules, incorrect earnings calculations, or missed deadlines.

A structured, compliant approach ensures:

Legal obligations are met
Staff are treated fairly and consistently
Risk of fines or enforcement action is reduced
Payroll processes remain accurate and efficient

Our role is to support employers in meeting their workplace pension duties accurately, on time, and with minimal disruption, ensuring compliance today and confidence going forward.