Workplace pensions became mandatory under the Pensions Act 2008, introduced through a phased rollout beginning in October 2012 and applying to all employers by February 2018. Under automatic enrolment, employers must enrol eligible employees into a qualifying workplace pension scheme and make minimum contributions. 

1. Duties Start Date

Employers now have an immediate legal duty from the day an employee starts work.

• This is known as the Duties Start Date
• Automatic enrolment must be assessed from this date
• There is no longer a separate “staging date” for new employers
   

2. Nominate a Contact

Once you receive correspondence from The Pensions Regulator (TPR):

• Nominate a contact to receive statutory emails and reminders
• You will need:
• The Letter Code from TPR
• Your PAYE reference
• Failing to nominate a contact increases the risk of missing deadlines.

3. Choose a Qualifying Pension Scheme

You must provide a pension scheme that meets auto-enrolment requirements, including:

• Minimum contribution levels
• Automatic enrolment of eligible employees
• If you already have a scheme, confirm with your provider or adviser that it qualifies.

NEST (National Employment Savings Trust)

• Government-backed scheme designed for auto enrolment
• Free for employers to operate
• Low costs for employees
• Open to employers of any size
• Other providers are available, but NEST is commonly used due to simplicity and compliance.

4. Assess Your Workforce

At the Duties Start Date and every pay period, you must assess each worker.

You must automatically enrol employees who:

• Are aged 22 or over
• Are under State Pension Age
• Work in the UK
• Earn more than £10,000 per year (2025/26)
• Employees who:earn £6,240–£10,000 can opt in, and you must contribute
• Are under 22 or over State Pension Age can also opt in
   

5. Contribution Rates ( 2025/26)

The minimum total contribution is 8% of qualifying earnings:

• Employer: at least 3%
• Employee: up to 5%
• 1% of the employee contribution is tax relief from HMRC
• Qualifying earnings are between: £6,240 and £50,270
• This means: The first £6,240 is ignored
• Maximum qualifying earnings are £44,030
• Example: Salary £20,000 - Qualifying earnings = £13,760 (£20,000 – £6,240)

6. Opting Out

Employees can opt out:

• Within one month of being enrolled
• After opting in voluntarily
• Opt-outs must be processed through the pension provider – employers must not encourage opt-outs.

7. Postponement

Employers may delay assessment and enrolment for up to three months.

Key rules:

• Employees must be formally notified in writing 
• Postponement can only start from:
• Duties Start Date 
• Employee’s first day
• Date the employee becomes eligible
• Postponement does not delay your legal duties
• Must be applied within six weeks of eligibility
   

8. Declaration of Compliance

Once auto enrolment has been completed, you must:

• Submit a Declaration of Compliance to TPR
• This confirms you have met your legal duties
• Failure to submit is one of the most common causes of fines
   

9. Re-enrolment

Every three years, employers must:

• Re-assess eligible staff
• Re-enrol employees who previously opted out (if eligible)
• Complete a re-declaration of compliance
   

10. Penalties for Non-Compliance

The Pensions Regulator has enforcement powers, including:

• £400 fixed penalty notice
• Escalating daily fines from £50 to £10,000
• Fines depend on employer size and severity of non-compliance
  

Key Takeway for Employers

Automatic enrolment is an ongoing legal obligation, not a one-off task. Employers must:

✔ Assess staff every pay period
✔ Enrol eligible employees
✔ Pay minimum contributions
✔ Communicate correctly
✔ File declarations on time

Failure to comply can result in significant financial penalties.