Auto-enrolment

Auto-enrolment is short for ‘automatic enrolment for workplace pensions’. If you are a working employee and over the age of 22, your employer has to automatically provide you with a pension scheme. The only exception to this rule is for the directors of limited companies if they do not have a specific contract of employment.

Auto-enrolment was first introduced in some cases in 2012, and since February 2018 it has been law to provide all eligible employees with a pension scheme. This was put into place in order to prevent people from missing out on the security of a workplace pension simply because it wasn’t offered.

To be eligible for auto-enrolment, you must meet the following criteria:

• Over 22 years old
• Earning more than £10,000 per year
• Working in the UK

The amount that you pay into your pension depends on your qualifying earnings before the deduction of Income Tax and National Insurance. Between yourself, your employer and government tax relief, your pension contribution will total 8.0% of your qualifying earnings, with you paying 4%, your employer paying 3% and government tax relief paying 1%. This is the minimum contribution, so we recommend that you check your contract of employment for specific details as this may be higher, depending on your employer.