Pension auto-enrolment

Auto-enrolment is the duty, under the Pensions Act 2008, for every UK employer — even with a single member of staff — to put eligible workers into a workplace pension scheme and contribute to it. The design is deliberate: saving happens by default, and anyone who doesn't want to must actively opt out.

How it works

• Workers are assessed each pay period. Those within the eligible age band who earn above the earnings trigger must be enrolled automatically; the age band, trigger and qualifying earnings band are set by the Department for Work and Pensions and reviewed each year.
• Minimum contributions are set in legislation as a percentage of qualifying earnings, split between employer and worker — current percentages are on The Pensions Regulator's site.
• Enrolled workers can opt out within the opt-out window for a refund; the employer must never encourage or pressure them to.
• Every three years the employer must re-enrol eligible staff who opted out, and re-declare compliance to The Pensions Regulator.

Shift teams in particular

Variable hours mean variable earnings, so casual staff can drift above and below the earnings trigger from one pay period to the next. Postponement (up to three months) can smooth short-term spikes, but assessment must still happen every pay run — this is one to automate through payroll rather than track by hand.

Pensions Act 2008 — thresholds reviewed annually by the DWP; enforced by The Pensions Regulator, which can issue compliance and penalty notices.

Related terms

• National Insurance
• PAYE
• Payslip