What is a workplace pension?

A step-by-step guide to workplace pensions.

Published: 15 Dec 2025

Key points

All UK employers have a legal responsibility to provide a workplace pension for their employees.
You have a few other responsibilities, like choosing the right provider and keeping your employees up to date.
It’s important to understand how auto-enrolment works – this is your bread and butter when it comes to workplace pensions.

A workplace pension helps your employees to save for their retirement. When they retire, they’ll have a pension pot they can withdraw money from. In the UK, most workplace pensions are defined contribution schemes – where both you and the employee pay into the pot every month. The money’s then invested in funds, so their final retirement amount depends on how much is paid in, investment performance and scheme charges.

What are my legal obligations?

You must automatically enrol all eligible employees into your pension scheme. You’ll need to make a minimum contribution amount every month – this is currently 3% of an employee’s qualifying earnings. If an employee opts out of the scheme, you need to re-enrol them every three years ^{Footnote [1]}. Read our article about auto-enrolment for more information.

You must auto-enrol employees if they:

are aged 22 to 66 (the current state pension age)
earn more than £10,000 a year
work in the UK.

Other employees can opt in if they want to and you might need to make contributions into their pension, depending on how much they earn. Find out more about eligible employees and who to enrol.

What are my responsibilities?

Keeping on top of your to-do list is important but can be straightforward with the right approach:

Choose and set up a pension scheme
Communicate clearly with your employees
Submit all contributions by their due date
Keep your records up to date and report to The Pensions Regulator

Every time an employee is enrolled, you’ll need to tell them:

who the provider is
the name of the scheme
how much both of you are paying in
their opt-out and re-joining options

How do I choose the right pension provider?

Finding the right pension provider can feel daunting, but it doesn’t need to be. When doing your research, ask yourself questions like: are they compliant with auto-enrolment rules? Do their investment options reflect our businesses values and ethical standards?

Other things to consider are the fees and charges involved in running the pension scheme, for both you and your employees. And some providers offer more employee support and digital tools than others, so it’s worth thinking about that too.

Like with any big decision about your pension scheme, we recommend getting professional advice from a financial adviser. The adviser may charge a fee for their services.

How do I stay compliant?

Continue to monitor your staff and keep checking their eligibility – this depends on their age and earnings. You’ll also need to re-enrol employees that have opted out of the scheme every three years.

You should make sure you know about any changes from The Pensions Regulator – they’ll ask you to declare your compliance every three years. They’ve got lots of helpful information about staying compliant during auto-enrolment, including their checklists.

Are there any employer benefits?

Providing a workplace pension is a legal requirement for employers. But if you put the time and effort required to choose the right scheme, then you’ll benefit too. A good pension can help to attract and retain the best talent, as well as improving morale and financial wellbeing.

All contributions you make are tax deductible, which reduces your taxable income. And depending on how you set up your contributions, some schemes can reduce your National Insurance costs.