Workplace Pension Law for UK Employers:
Workplace pensions became mandatory through a phased approach of automatic enrolment, starting with larger employers in October 2012 and gradually extending to smaller employers by February 2018. The Pension Act 2008 mandated that employers automatically enrol eligible employees into workplace pension schemes and contribute towards them.
Your Responsibilities:
As the employer, you are ultimately responsible for ensuring that you meet your statutory duties with regards to auto enrolment and the pension reform. It is important that you understand your responsibilities and are aware of the costs of compliance that this additional burden will bring, both in terms of pension contributions and administrative costs. The initial steps that you need to take are as follows:
1. Duties Start Date:
Employers now have a legal duty to automatically enrol eligible employees into a workplace pension scheme from the day the employee starts work.
This date is known as the "Duties Start Date."
https://help.thepensionsregulator.gov.uk/faq/staging_date/duties-start-date
2. Nominate a Contact:
Upon receiving a letter from the Pension Regulator, it's crucial to nominate a contact for email communications. This allows The Pensions Regulator to send important information to the designated contact, ensuring you don't miss any updates or deadlines. To nominate a contact, you'll need the Letter Code and PAYE reference from the letter. The PAYE reference can also be found on the letter from HMRC when you first registered as an employer or from your payroll software.
https://nomination.ae.tpr.gov.uk/
3. Choose a Qualifying Pension Scheme:
Employers are able to choose the pension scheme that they want to provide, as long as it meets certain criteria, such as meeting the minimum level of contribution and automatically enrolling all eligible employees. If you have an existing pension scheme in place, you will need to check with your pension provider or an IFA that the scheme meets the qualifying conditions for auto enrolment.
NEST (National Employment Savings Trust) - www.nestpensions.org.
NEST is the workplace pension set up by the government specifically for auto enrolment. It is open to employers of any size and is designed to meet the needs of people who are largely new to pension saving. NEST is our preferred pension provider as they offer a scheme, which is free of administration fees for employers and low cost for employees. Other alternative workplace pension providers are also available.
4. Assessing your workforce:
At your staging date and then at every pay date, you will need to identify which members of staff to automatically enrol and which will have a right to join your pension scheme on request.
All businesses must automatically enrol all employees who are:
• Aged over 22
• Work in the UK
• Under the state pension age
• Earn over £10,000 a year
Workers who earn less than £10,000 can ask to be enrolled if they want to and, if they earn more than £6,240 (qualifying earnings), their employer will be obliged to make a contribution too. These rates are correct for the 2025/26 tax year. Those aged under 22, or over state pension age and still working, can also opt-in in the same way.
5. Contribution Rates:
The minimum contribution rate is currently 8%, made up of at least 3% from the employer, up to 5% from the employee, 1% of this paid by HMRC as basic rate tax relief.
It’s important to note that you can choose to pay contributions on the employee’s pensionable pay ( Qualifying Earnings) between £6,240 and £50,270 for the 2025/26 tax year and not on the employee’s total earnings. These figures are reviewed annually.
The first £6,240 isn’t included, so qualifying earnings can’t be more than £44,030 (£50,270 minus £6,240). For example, if a worker earns £20,000 their qualifying earnings would be £13,760.
NEST information on qualifying earnings:
6. Opting Out:
‘Opting out’ is when a staff member decides to leave your pension scheme within a month of being enrolled. Staff you have automatically enrolled and those who have opted in can choose to opt out.
http://www.thepensionsregulator.gov.uk/opting-out.aspx
7. Postponement:
• An employer can choose to delay assessing and therefore enrolling an individual, some, or all of their staff into a pension scheme for up to three months.
• They must write to their staff to tell them they’re postponing automatic enrolment for them.
• Employers can only postpone automatic enrolment from the date their legal duties started, a staff member first day of employment and a date a staff member becomes eligible for automatic enrolment.
• If an Employer postpones from the date their legal duties started, it doesn't change the date the duties apply from.
• Employers can only use postponement if they are within six weeks of the date they became eligible for automatic enrolment.
8. Declaration of compliance:
As a final stage of your auto enrolment, the Declaration of compliance must be completed on the Pension Regulator website to confirm that you have met your legal duties for automatic enrolment and re-enrolment.
https://www.autoenrol.tpr.gov.uk/TPRGateway/Home
9. Re-enrolment:
Your re-enrolment duties must be carried out approximately three years after your automatic enrolment staging date. Your duties will vary depending on whether you identify that you have staff to re-enrol, or whether you have no staff to re-enrol. You will need to complete a re-declaration of compliance to confirm that you have met your re-enrolment duties.
https://www.thepensionsregulator.gov.uk/en/employers/re-enrolment
10. Penalties for non-compliance:
The Pensions Regulator (TPR) can impose fines on employers who fail to comply with their pension duties, starting with a fixed penalty of £400. TPR can also issue escalating penalty notices for ongoing non-compliance, with daily fines ranging from £50 to £10,000, depending on the number of employees and the severity of the breach.
https://www.thepensionsregulator.gov.uk/en/employers/What%20happens%20if%20I%20dont%20comply