Own Rules Trust services

The typical scheme charges for a workplace pension in the UK can vary, depending on the provider and the type of scheme. The most common charges are scheme administration charges. In addition, an employer is required to make a minimum level of contributions based upon a member's qualifying earnings.

Scheme administration charges

1. Set-up fees
   Many providers don’t charge set-up fees, especially for small employers. If charged, set-up costs can differ depending on the scheme size, the provider, and the level of support offered.
2. Annual management charge
   Usually 0.3% to 0.75% of the member's pension pot a year, depending on the scheme type and provider.
3. Ongoing administration fees
   Some schemes may charge a monthly fee for each member, though many modern schemes include this in the annual management charge.
   
4. Payroll integration or middleware costs
   If your payroll software doesn’t integrate directly, you might need middleware. Costs can differ depending on the number of members.
   
5. Additional costs to consider
   Adviser or accountant fees (if you use one) and time spent by internal staff

Employer pension contributions

The cost of a workplace pension to an employer in the UK depends on the type of scheme and the member's earnings. For employers who are required to comply with automatic enrolment requirements, the minimum legal contribution is 3%. This is based on a member's qualifying earnings between £6,240 and £50,270 a year (2025/26 tax year thresholds).

Tax relief is the money the government adds to a member's workplace pension, based on how the employer and member pays into the pension and the member’s tax status.

There are two main methods of adding tax relief:

1.      Relief at source (most common for workplace group personal pensions)

• The member contributes to their pension from their net pay (after tax)
• Their pension provider claims 20% tax relief from HMRC and adds it to the pension
• If the member is a higher-rate taxpayer, they can claim additional relief through their self-assessment tax return
• Example: Member pays £80 → HMRC adds £20 → £100 goes into the pension
  

2.       Net pay arrangement (common in workplace occupational pensions)

• Contributions are taken from the member's gross pay (before tax)
• The member automatically gets full tax relief at their highest rate
• There’s no need to claim anything back
• Example: If a member earns £30,000 and contributes £1,000, their taxable income becomes £29,000

Why it matters

• It boosts pension savings at no extra cost to the pension owner
• It’s especially beneficial for higher-rate taxpayers
• Over time, it can significantly increase retirement income

Moving a workplace pension scheme from one provider to another in the UK is a structured process that involves co-ordination between the trustees (where applicable), the employer, the current pension provider, and the new provider. Here’s a step-by-step overview of how it typically works: 

1.    Review your current scheme

• Understand the terms, fees and any exit charges
• Check if there are any benefits or valuable protections, features or guarantees that transferring members could lose

2.     Define your objectives

• Are you looking for lower fees, better investment options, improved service, or digital tools?
• Decide whether you want to replace the scheme entirely or run both schemes in parallel for a time

3.     Choose a new provider

• Compare pension providers based on:
  • Charges
  • Investment options and performance
  • Member tools and support
  • Compliance with auto enrolment rules
  • Retirement benefit options

4.     Consult members

• Trustees are legally required to tell employees or members about the change and consult with them
• Give your employees or members clear communications on how the transfer affects them

5.     Set up the new scheme

• Work with the new provider to:
  • Set up the scheme
  • Integrate with payroll
  • Make sure it meets auto enrolment requirements

6.     Tell the old provider

• Tell your current provider of your intention to stop contributions and transfer the scheme
• Ask for a bulk transfer if moving existing funds

7.     Transfer contributions

• You can either:
  • Stop contributions to the old scheme and start afresh with the new one, or
  • Arrange a bulk transfer of existing pension funds (requires regulatory compliance and may require member consent)

8.     Communicate with employees or members

• Give your employees or members details of the new scheme
• Provide them with information about transferring old pension pots (if applicable)
• Offer support for questions or concerns

9.     Update payroll and records

• Make sure the relevant payroll system(s) are aligned with the new provider or scheme
• Keep records of the transition for compliance and audit purposes

10.     Monitor and review

• Regularly review the new scheme and/or provider's performance and member satisfaction