Auto Enrolment Q&As

So who will automatically be enrolled into a workplace pension
scheme?

A workplace pension is a saving scheme for retirement organised through an employer. The employer may have their own scheme, offer one from a specialist pension provider, or use a government-backed scheme.

Under the new system, those who work in the UK, are aged over 22 and under the state pension age, are not already in a scheme, and earn more than £8,105 a year will automatically be enrolled.

Part-time workers who earn less than that can ask to take part if they want to and, if they earn more than £5,564, their employer will be obliged to make a contribution too.

Those aged under 22, or over state pension age and still working, can also opt-in in the same way.

Do I have to take part?

No. You may decide that you need all of your monthly pay to make ends meet or
you have a private pension policy you think is sufficient.

Staff will be given a letter about the scheme when it starts at their workplace. This will explain who the pension provider is. Workers can ask this provider for an opt-out form.

If they fill it in within a month, then their involvement will be cancelled.

If they take longer, then they will start to build up a very small pension pot. This will still exist when the opt-out is processed, but it will just sit there untouched until retirement.

It is worth remembering that by opting out, workers will miss out on the contribution their employer puts into the pension. In the majority of cases, they simply will not get these payments in any other way, such as in their regular pay.

Those who opt out will also be enrolled again every three years by an employer, or after three months at a new job, at which point they will need to complete the opt-out process again.