Workplace Pension Auto-Enrolment Explained

Why you might already be paying into a pension you never signed up for, and how much has to go in by law

If you've never actively signed up for a pension but have one anyway, this is why: by law, most employers have to put most of their staff into a workplace pension automatically, and pay into it, without you having to ask. This page explains who that applies to, how much has to go in by law, and what your options are if you don't want to be in it.

Who gets automatically enrolled

Your employer must automatically enrol you if you're aged between 22 and State Pension age, and you earn at least £10,000 a year. If that's you, there's nothing you need to do, you're already in, and both you and your employer are already contributing.

If you don't meet both of those conditions, you're not automatically enrolled, but you still have options:

• Earning between £6,240 and £10,000 a year, or outside the age range, you can ask to opt in, and if you do, your employer must contribute too, on the same terms as anyone automatically enrolled.
• Earning under £6,240 a year, you can still ask to join a scheme, and your employer can't refuse, but they don't have to contribute anything themselves.

How much has to go in

The legal minimum is 8% of your qualifying earnings, not your whole salary. Qualifying earnings are the slice of your pay between £6,240 and £50,270 a year; anything below or above that band doesn't count toward the calculation.

Of that 8%:

• Your employer must pay at least 3%.
• You must pay at least 5%, including tax relief, for a basic-rate taxpayer under a relief-at-source scheme (the illustrative case gov.uk itself uses, and the same method used throughout the Salary Calculator), that means only 4% actually leaves your pay; the government adds the other 1% as tax relief, the same way it does throughout Your Pension Contributions Explained. If your scheme uses net pay arrangement or salary sacrifice instead, the same 5% still applies, but it's delivered differently. See that page for how.

If you want to see this reflected in the Salary Calculator, enter 4% in its pension contribution field, not 5%. The calculator's percentage is what leaves your pay, before relief is added, matching the two figures above rather than the inclusive-of-relief headline rate. It also applies that percentage to your whole salary rather than just the qualifying earnings band described above, which will overstate the contribution for anyone earning outside that band, a simplification worth flagging if you're checking the statutory minimum specifically, rather than a general estimate.

Plenty of employers pay more than the legal minimum, or calculate it on your whole salary rather than just the qualifying earnings band, both are common, and both are more generous than the law requires, not a mistake. Check your own scheme's terms rather than assuming the statutory minimum is what you're actually getting.

Opting out

You can opt out at any time. If you do it within one calendar month of being enrolled, you get a full refund of everything taken from your pay so far, and it's as if you were never enrolled. Opt out after that month and you can still stop future contributions, but whatever's already gone in stays invested until you're able to draw your pension, there's no refund.

Even if you opt out, the law doesn't let that be the end of it: every three years or so, your employer has to automatically re-enrol you if you still meet the eligibility criteria, giving you a fresh one-month window to opt out again if you still want to. This is deliberate. It's designed to catch people who opted out once for reasons that may no longer apply.

This page explains general automatic enrolment rules for employees and is not personalised advice; see the disclaimer. Whether to stay opted in, opt out, or increase your contributions above the minimum depends on your own circumstances; speak to a qualified financial adviser before making decisions.