What is automatic enrolment?

Under a new law, millions of us are being automatically enrolled into company pension schemes for the first time. Here you can find out whether you’ll be enrolled – and what’s in it for you.

Watch our short video guide to learn what automatic enrolment is, and how it can help make your journey to retirement an easier one.

Video transcript

Automatic enrolment - the basics and benefits

Will I be automatically enrolled?

Your employer will have to enrol you in a pension scheme if you:

  • work in the UK
  • are aged between 22 and state pension age
  • earn more than £10,000 a year
  • aren’t already in an appropriate pension scheme

Even if you don’t meet these criteria and won’t be automatically enrolled, you can still join your employer’s pension scheme. All you need to do is let them know you want to join.

When will I be enrolled?

It depends how big the company you work for is. The very largest companies started automatically enrolling staff into a pension scheme in October 2012. All other companies will have to enrol their eligible employees by the start of 2018, with the bigger ones going first.

Whether you’re being automatically enrolled or not, your employer will write to you in advance to explain what’s happening and when.

What’s in it for me?

For a start, automatic enrolment makes it easier for you to invest for your retirement. Rather than you having to take steps to join a pension scheme, most employees will be signed up as a matter of course.

But perhaps the biggest benefit is that if you’re automatically enrolled, your employer will have to contribute to your pension as well as you.

The minimum amount you and your employer must pay into your plan is worked out as a percentage of your pre-tax income. See the table below for details:

Date Minimum combined payments
Oct 2012 to Sep 2017 2% (including 1% from employer)
Oct 2017 to Sep 2018 5% (including 2% from employer)
Oct 2018 onwards 8% (including 3% from employer)

As well as these contributions from your employer, you’ll also benefit from tax relief from the government. For every 80p you pay into your pension plan, the government adds 20p in tax relief, boosting it to a total contribution of £1. So if you paid £100 into your pension each month, the government would boost it to £125.

There are several other benefits to paying into a pension, too. Read about the benefits of paying into a pension plan to find out more.

How can auto-enrolment make your retirement journey easier? Listen to these people like you find out why.

What will it cost me?

See the table in the section above for details of the minimum you’ll have to pay in. You can pay in more, of course, if you want to increase the amount you’re setting aside. And remember that if you’re automatically enrolled, you’ll also get contributions from your employer - and tax relief from the government.

How much might I get back?

We can’t tell you what you’ll get back here, but once you’re a member of the pension plan, we will send you annual statements giving an indication of the kind of retirement income you could get for the amount you’re paying in. This will be based on a few assumptions, so you’ll need to read through it carefully.

If you can’t wait that long, you can check how much your pension plan might be worth using Pension Tracker

Can I opt out of the pension scheme?

Your employer has to enrol all their eligible employees, but you can opt out if you want to. Think carefully, though. If you opt out, you’ll be missing out on the contributions your employer makes into your pension plan.

Please note: You can only opt out after you’ve been enrolled in the first place. We’ll send you details of how to do it after you’ve been enrolled.

WC03105 10/2015

Important Information

Please take the time to read the essential guide to your scheme, which includes the key features and terms and conditions.

For your Company Pension

Your company pension scheme

For your Company Stakeholder Pension

Your company stakeholder pension scheme

Learn the lingo

The world of pensions can be a confusing place. So visit our jargon buster to learn the terms.

Calculate your retirement income

Use our calculator to see how much you might get when you retire.

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