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Auto Enrolment

The introduction of Auto-Enrolment in the UK means that 1.8 million small business owners will have to offer an Auto-Enrolment pension scheme for employees.

This means that most UK employers will be obliged to put in place a qualifying workplace pension scheme and automatically enrol their qualifying employees into it. Employers then have to make contributions to their workers’ pensions every pay period.

When will this affect my business?

The size of your business will determine when you have to enrol your employees. This is called your staging date.

Who do I need to enrol?

Employees fit into one of three groups: eligible, entitled and non-eligible. A worker assessment will help you identify which group each of your employees fits into.

Eligible workers must be automatically enrolled and you must pay minimum contributions.

Entitled workers can ask to join, although you do not have to pay contributions for this group. Entitled workers are those aged at least 16 but under 75 who earn less than £5,824.

Non-eligible workers can ask to be enrolled into your scheme and if they do, you must pay minimum contributions.

How much do I have to contribute?

The government has set minimum standards that employers must meet. For most employers, this means paying minimum contributions, which will start at 1% of a worker’s “qualifying earnings” and increase to 3% over the next few years.