Updated: Jun 7, 2025
Auto-Enrolment Pensions
Meet your legal obligations and support your team with stress-free auto-enrolment pension setup and management. We’ll guide you through every step, from compliance to contributions.
Auto-enrolment pensions are a cornerstone of workplace financial planning in the UK, ensuring millions of employees are saving for retirement. For clients of Reaveley Cooper Accountants, understanding auto-enrolment is essential for both compliance and long-term financial wellbeing.
What Is Auto-Enrolment?
Auto-enrolment is a government initiative requiring all UK employers to automatically enrol eligible employees into a qualifying workplace pension scheme and make contributions on their behalf. This system aims to boost retirement savings and reduce reliance on the State Pension as people live longer.
Who Must Be Auto-Enrolled?
You must automatically enrol staff who:
Are aged between 22 and State Pension age
Earn more than £10,000 a year (or £833 a month/£192 a week)
Work in the UK under a contract of employment
If employees do not meet these criteria, they may still have the right to opt in or join a pension scheme, but automatic enrolment is not mandatory for them.
Employer Duties and Compliance
Employers must:
Assess their workforce to determine eligibility
Choose a qualifying pension scheme (such as NEST, The People’s Pension, or NOW Pensions)
Automatically enrol eligible staff and make minimum contributions
Communicate clearly with employees about their rights and contributions
Declare compliance with The Pensions Regulator within five months of their duties start date
Re-enrol eligible staff who have opted out every three years and complete a new declaration of compliance
Failure to comply can result in penalties from The Pensions Regulator.
Contribution Rates (2025/26)
Contribution Type | Minimum % of Qualifying Earnings |
|---|---|
Employer | 3% |
Employee | 5% (including 1% tax relief) |
Total | 8% |
Opting Out and Re-Enrolment
Employees can choose to opt out after being enrolled, but they must be re-enrolled every three years if still eligible. Opting out means missing out on employer contributions and tax relief, which can significantly impact retirement savings.
Why Auto-Enrolment Matters
Boosts Retirement Savings: Employees benefit from employer and government contributions, making it easier to build a substantial pension pot.
Legal Requirement: All employers must comply or face regulatory action.
Flexible for Employees: While automatic, the system allows employees to opt out if they wish, though staying in is usually financially beneficial in the long term.
How Reaveley Cooper Accountants Can Help
Reaveley Cooper Accountants guide businesses through every stage of auto-enrolment, from assessing staff and selecting pension schemes to ensuring ongoing compliance and handling re-enrolment cycles. We help you avoid costly mistakes and ensure your employees’ futures are secure.