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What is Auto Enrolment?

Automatic enrolment is more commonly known as 'auto enrolment' and employers are required by law to provide a compliant scheme for their employees...

  • Automatic enrolment into a workplace pension is a hassle free way for workers to save for their retirement whilst they earn.
  • Employers now have responsibilities to ensure that all eligible employees are enrolled into a qualifying pension scheme.
  • This could be an existing scheme, a new company pension, or a scheme which is accountable to the government called National Employment Savings Trust (NEST).
  • Employers will be required by law to contribute up to 4% of an employee's earnings into a compliant pension scheme, with the employee required to contribute up to 5%.

Employers will automatically enrol workers into a workplace pension who...

  • are aged 22 or over
  • are not already in a qualifying pension scheme
  • are under State Pension age
  • earn more than £10,000 a year (this figure is reviewed every year), and
  • work or usually work in the UK.

There are two other categories of worker; entitled worker and non-eligible jobholder, which need to be assessed for their eligibility to join the scheme based upon their age and earnings in each PAYE reference period (weekly or monthly).