What employers must do
Your employer must write and tell you if you’re being enrolled in a workplace pension or not. When you'll be enrolled depends on the size of the organisation you work for. Large employers started first to enrol their employees. Your employer will give you the exact date nearer the time.
If you’re being automatically enrolled, your employer must tell you in writing:
- the date of your enrolment
- the pension scheme you will be enrolled in
- how much will go into your pension (as a proportion of your salary or as an amount)
- how you can opt out of the pension, if you want to
Your employer must also:
- accept your request to join their workplace pension, if you have previously opted out or stopped paying - your employer must accept your request once in a 12 month period but can choose to accept further requests if they want to
- enrol you back into the pension at regular intervals (usually every three years), if you meet the eligibility criteria and aren’t in a workplace pension
- pay your full contributions on time, to the pension scheme provider
If you’re already in a workplace pension, your employer must confirm in writing that the pension meets the government’s new standards.
If you’re not being enrolled and you’re not already in a workplace pension, your employer must:
- explain in writing that you have a right to join a workplace pension
- explain how you can join
If you ask your employer to join a pension scheme, you may be entitled to your employer’s contribution. Your employer will let you know if this is the case.
If your employer closes their pension scheme, they must immediately enrol all members into a replacement pension.
If you’re no longer a member of a workplace pension because of a mistake by your employer, they must enrol you back in immediately.
What employers can choose to do
Employers are allowed to delay the date they enrol you in a workplace pension, by up to three months from the deadline given to them by the government.
If the pension is a defined benefit or hybrid pension scheme, and you have an existing right to join your employer’s pension, your employer can delay enrolling you for several years.
If your employer does delay, they have to tell you in writing. If you want to join your workplace pension in the meantime, your employer must accept your request.
Employers can use ‘salary sacrifice’. This is an arrangement that must be agreed between you and your employer. You give up part of your pay and your employer pays this amount into your pension pot instead. It is also known as ‘salary exchange’ or ‘SMART scheme’.
What employers can’t do
There are workplace pension rules for employers. By law an employer can’t:
- encourage or force workers to opt out of their workplace pension
- suggest during the recruitment process that a worker can only be employed if they opt out of their workplace pension
- dismiss a worker or treat them unfairly because they stay in their workplace pension
Problems with being 'automatically enrolled'
If you're concerned about how your employer is dealing with your automatic enrolment into a workplace pension, you should contact The Pensions Regulator. If you're uncertain that your concern needs to be reported, you should contact The Pensions Regulator:
What to do if you don't want a workplace pension
You can opt out. Your employer must tell you in writing how to do this.
Contributions to your workplace pension
When you pay into a workplace pension, your employer and the government also contribute. The amount paid depends on your employer’s pension scheme. Find out how much this could be and how to get an estimate of your pension fund at the link below:
Minimum contribution to your workplace pension
The amounts paid in by you, your employer and tax relief from the government, are usually calculated as an amount of your earnings. Your employer will let you know what these are. The government has set minimum amounts for defined contribution pension schemes.
Minimum that has to be contributed in total
The government has set a minimum percentage that has to be contributed into your workplace pension in total. It is made up of your contribution, your employer’s contribution and tax relief, added together. The minimum will start at two per cent and increase to eight per cent over the next few years.
Minimum that has to be contributed by your employer
As part of the overall percentage, the government has also set a minimum percentage that has to be contributed by your employer. This will start at one per cent and increase to three per cent over the next two years.
These minimum percentages do not apply to all of your salary. They apply to what you earn over a minimum amount (£6,032 in the 2018-2019 tax year) up to a maximum limit (£46,350 in the 2018-2019 tax year). This is sometimes called ‘qualifying earnings’.
For example, if you earn £18,000 a year, the minimum percentages are calculated on the difference between £18,000 and £6,032, which is £11,968.
Contribute more than the minimum
Your employer can choose to pay more into your workplace pension than the minimum required. If so, you can choose to reduce your own contribution. But the overall contribution must meet at least the minimum level set by the government. You can also choose to increase your contribution.
Contracting out has ended
The Pensions Act 2014 and the Pensions Act (Northern Ireland) 2015 introduced a new State Pension in Great Britain and Northern Ireland for people reaching State Pension age on or after 6 April 2016.
Contracting out ended on 6 April 2016. If you were contracted out:
- you will no longer be contracted out
- you will pay more National Insurance (which will be the standard amount of National Insurance)
- Changes to contracting out from 6 April 2016
To help employers and employees, guidance is available on GOV.UK. References in the guidance to the Pensions Act 2014 should be taken as including references to the Pensions Act (Northern Ireland) 2015.
- New State Pension: information for employers and trustees with open, contracted-out defined benefit pension schemes - GOV.UK website
You can find out more about the new State Pension and how it applies to Northern Ireland or about workplace pensions, including defined benefit pension schemes, at the following pages: