What Is Auto Enrolment?
Auto enrolment is the legal requirement for employers to put eligible employees into a workplace pension and contribute to it.
Every employer in the UK must operate auto enrolment correctly — even if they only have one employee.
This guide explains what auto enrolment is, who it applies to, and what employers must do to stay compliant.
What Auto Enrolment Means
Auto enrolment ensures that employees save into a pension while working.
Under this system:
Employers must assess their workforce
Eligible employees must be automatically enrolled
Employers must make pension contributions
Employees can opt out if they choose
Contributions must be paid to a pension scheme
Records must be kept for compliance
Auto enrolment is monitored by The Pensions Regulator (TPR), and penalties apply for non-compliance.
Who Must Be Auto Enrolled?
Employers must automatically enrol eligible jobholders, who are:
Aged 22 to State Pension age
Earning above £10,000 per year (threshold may change annually)
Working in the UK
Classed as workers (not self-employed contractors)
Other worker types:
Non-eligible jobholders – can opt in and receive employer contributions
Entitled workers – can join the pension, but employers don’t have to contribute
Correct classification is essential.
Employer Duties Under Auto Enrolment
Employers must:
1. Assess employees every pay period
You must determine:
Worker type (eligible, non-eligible, entitled)
Earnings in that period
Age and location
Any changes affecting status
Assessment must happen every pay cycle, not just once a year.
2. Enrol eligible employees
Eligible employees must be enrolled automatically unless they opt out.
Employers must:
Provide statutory communications
Enrol workers promptly
Ensure correct contribution rates
3. Make pension contributions
The minimum contributions are currently:
Employer: 3%
Employee: 5%
Total: 8%
Higher contributions can be agreed through contractual or enhanced schemes.
4. Pay pension contributions on time
Employers must:
Deduct contributions from pay
Add employer contributions
Submit files to the pension provider
Pay the pension contribution amount by the provider’s deadline
Late payments can breach regulations and affect employees’ pensions.
5. Manage opt-outs and re-enrolment
Employees can opt out within a set period.
Every three years, employers must:
Reassess employees
Re-enrol those who meet eligibility
Complete a re-declaration of compliance
TPR audits this closely.
6. Keep accurate records
Employers must keep records for at least 6 years, including:
Assessment results
Contributions
Opt-ins and opt-outs
Pension communications
Scheme details
Payment confirmations
Failing to keep records can cause compliance issues.
Choosing a Pension Scheme
Employers must select a suitable workplace pension provider.
Popular choices include:
NEST
The People’s Pension
Smart Pension
Aviva
Legal & General
Royal London
The scheme must meet auto enrolment rules and integrate with payroll processes.
Auto Enrolment and Payroll
Payroll must:
Assess worker status each pay period
Calculate contributions
Apply correct qualifying earnings (or other basis)
Ensure salary sacrifice (if used) is applied correctly
Produce pension files for the provider
Show pension contributions on payslips
Include data in RTI submissions
Auto enrolment is closely linked to payroll compliance.
Common Auto Enrolment Mistakes
Typical issues include:
Incorrect worker classification
Missing or inaccurate assessments
Late or missing pension contributions
Contributions calculated incorrectly
Not re-enrolling employees every 3 years
Not completing the re-declaration
Wrong pensionable earnings basis
Salary sacrifice errors affecting contributions
Pension files not matching payroll data
These can lead to penalties from The Pensions Regulator.
FAQ: Auto Enrolment
Do all employers have to operate auto enrolment?
Yes — even if you only employ one person.
Can employees opt out?
Yes, but employers must still enrol them first before opt-out.
Do directors need to be enrolled?
Often no — depending on payroll setup and whether they have employment contracts.
Do contributions need to be paid every pay period?
Yes — you must deduct and pay contributions promptly.