Auto-enrolment - the basics
Summary of this page
What is auto-enrolment?
'Auto-enrolment' is the name for the new pension legislation encouraging more employees to save for their retirement. If you're a UK employer, you'll need to put certain staff into a workplace pension scheme and make pension contributions for them.
Watch our short video to find out what's involved, or read on for more details. (Length: 73 seconds)
Auto-enrolment video transcript
If you don't know much about auto-enrolment yet, you soon will.
Under a new law, every employer now has to provide a workplace pension scheme for their employees.
You'll need to find a suitable scheme and automatically enrol eligible workers into it
These employees will usually need pay into their pensions, the government will chip in too, via tax relief, and you'll have to contribute as well.
Then you'll need to keep on assessing your workforce enrolling any workers into your scheme as and when they become eligible. And you'll need to communicate with them throughout – to let them know what's going on.
If all of this sounds a bit much, the good news is there are various people who can help you out.
You could ask a business adviser, such as a financial advisor accountant or payroll provider. Or you could deal with the pension provider directly.
Whatever you decide it's important to act soon to get your business sorted in good time.
That way, you'll have happier employees because you're helping them save for retirement. And you can get back to what you do best... without auto-enrolment giving you a headache.
Does auto-enrolment affect my business?
In all likelihood, yes. Auto-enrolment affects all employers with staff in the UK, even if you employ just one person. However, if you don't employ anybody (for instance, if your company has a number of directors, none of whom has an employment contract) then auto-enrolment doesn't apply to you.
What do I have to do?
Here are the main duties you'll need to perform to comply with auto-enrolment regulations:
Set up a suitable workplace pension scheme
Automatically enrol employees who meet certain criteria into your scheme
Enrol any other employees who ask to join
Communicate with your workforce to let them know what's going on
Make pension contributions for certain members of your scheme
Remove any automatically enrolled employees who opt out of your scheme
Submit a declaration of compliance to The Pensions Regulator and continue to check the rest of your workforce to see if you need to contribute for them.
Keep records and re-enrol employees who've opted out every three years.
For more detailed information, see our guide to dealing with auto-enrolment in eight easy steps.
When do I need to start doing my duties?
Your auto-enrolment duties come into effect on what's known as your 'staging date'.
By this date, you'll need to have a suitable workplace pension scheme in place, and to have assessed your workforce (finding out who you need to enrol)
The Pensions Regulator will tell you what your staging date is 12 months in advance. You can also find out by visiting the Regulator's website It's worth doing this early, as it can take a while to get your business ready for auto-enrolment.
Can I put my staging date back?
No. You can bring it forward but you can't put it back. You can, however, postpone some of the things you'll need to do by up to three months so they fit in better with your business. This is called 'postponement'.
If you do decide to bring your staging date forward, you need to let The Pensions Regulator know at least one month before the revised date.
What happens if I don't comply?
Auto-enrolment is your legal duty, and you can face penalties from The Pensions Regulator if you don't comply. The regulator has a variety of enforcement options at its disposal, including the power to investigate potential breaches and to issue fines.
Who do I need to enrol?
Different employees have different rights under auto-enrolment rules. Who you need to enrol in your scheme - and whether you need to contribute to their pension pot - depends on their age and how much they earn. Auto-enrolment only applies to staff who work in the UK.
|16 to 21||22 to state pension age(SPA)||SPA to 74|
|Below £5,824||Entitled worker
Must be enrolled if they ask. You're not obliged to contribute to their pension pot (but you can if you want)
|Over £5,824 but no more than £10,000||Non-eligible jobholder
Must be enrolled if they ask. You must contribute to their pension pot.
|£10,000 and over||Non-eligible jobholder||Eligible jobholder
Must be automatically enrolled. You must contribute to their pension pot.
This table is accurate for the 2016/17 tax year
When your staging date arrives, you'll need to know which category each of your employees falls into. We have software that can help you with this, available at no extra cost when you set up your Company Pension scheme. You can see if your payroll provider would do this for you, or you may prefer to work it out manually.
Do I have to pay contributions into the scheme?
Yes. By law, you'll need to make contributions for any eligibleand non-eligible jobholders who are in your scheme. You can also make contributions for entitled workers if you want - but you don't have to.
The Pensions Regulator has set minimum contribution levels that all employers need to pay, which will gradually increase between now and April 2019. You can pay more than these minimum levels if you wish, but you're not allowed to pay less.
How the minimum contribution levels are being phased in
The diagram above shows what the minimum contributions levels are based on an employees' qualifying earnings . You can also work out your contributions based on different types of earnings.
Visit our pension contributions page to learn more
Who can help me?
If you're thinking "Help!" right now, you're not alone. Auto-enrolment can seem daunting, but the good news is there's plenty of support available:
A business adviser
Many accountants, bookkeepers, financial advisers and payroll companies provide auto-enrolment support services - from helping you choose a scheme to actually running it for you. Please bear in mind they're likely to charge for this support.
If you're using our Company Pension as your pension scheme, it's easy to grant your business adviser access - enabling them to manage it on your behalf.
Getting help from Aviva
If you'd prefer to deal with auto-enrolment yourself, we offer lots of support to help make it easier for you:
- Need help getting ready for auto-enrolment? Our simple, free step-by-step tool may be ideal.
- Want a more in-depth plan that's linked to your staging date? Sign up for our free Auto-enrolment Planner
- Questions? We can't offer advice, but if you call our workplace pensions team on 0800 302 9507* and we'll be happy to help with information that helps explain your duties and options.
- Plus - our auto-enrolment pension schemes are simple to run and come with full training and support.
*Our lines are open Monday to Friday, 9am to 5pm. Calls may be monitored and/or recorded to help us improve our service. Please note that we can only provide information, not advice.
Company Pension from Aviva is great value, easy for you to run and designed for auto-enrolment.