How Does Workplace Pension Auto-Enrolment Work?

Who is automatically enrolled?

Your employer has to enrol you automatically if you meet all of these, according to gov.uk:

• You are a worker.
• You are aged between 22 and State Pension age.
• You earn at least £10,000 a year. The government kept this trigger at £10,000 for 2026/27, along with the £6,240 to £50,270 qualifying earnings band.
• You ordinarily work in the UK.

After enrolling you, your employer must write to you. The letter covers the enrolment date, the type of scheme and who runs it, how much goes in, how to leave, and how tax relief applies.

Not meeting those conditions does not shut you out. If you are not automatically enrolled, for example because you are under 22 or earn less than the trigger, gov.uk says you can usually still join if you want to, and your employer cannot refuse.

How much goes in under the minimum rules?

The legal minimum total is 8% of your “qualifying earnings”. Your employer pays at least 3% and you pay 5%. Qualifying earnings are the part of your pay from £6,240 up to £50,270 a year, before tax. Pay below £6,240 or above £50,270 does not count towards the minimum.

These are minimums. Your scheme’s rules can set higher amounts, and defined benefit schemes are usually higher. If your employer pays more than 3%, you may be able to pay less, provided the total still reaches 8%.

Employers also have a pay floor. They do not have to contribute if you earn £520 a month, £120 a week or £480 over four weeks or less.

What does that look like on a real salary?

Take a worker on £30,000 a year, with the minimum contributions on qualifying earnings. This is an illustration only, not a forecast.

1. Qualifying earnings: £30,000 minus £6,240 = £23,760.
2. Employee 5%: £23,760 × 0.05 = £1,188 a year, or £99.00 a month.
3. Employer 3%: £23,760 × 0.03 = £712.80 a year, or £59.40 a month.
4. Total: £1,188 + £712.80 = £1,900.80, which is 8% of £23,760.

To see how a pension payment fits alongside income tax and National Insurance on your payslip, try the take-home pay calculator.

How does tax relief work?

Pension contributions get tax relief. Gov.uk describes two common routes.

Net pay. Your employer takes your contribution from your pay before Income Tax is worked out. You get the relief without claiming anything, because you are simply taxed on less pay.

Relief at source. Your contribution comes out of pay that has already been taxed. Your pension provider then claims 20% from the government and adds it to your pot. This covers all personal and stakeholder pensions and some workplace pensions.

Gov.uk gives an illustration of how relief at source adds up on one payday: £40 from you, £30 from your employer and £10 of tax relief make £80 in the pension. Applying the same split to the example above, your £1,188 would be roughly £950.40 from your pay and £237.60 of relief.

Two further points from gov.uk. Under relief at source, the provider can claim 20% even if you earn too little to pay Income Tax, on contributions up to 80% of your yearly earnings, or up to £2,880 if you have no earnings. And if you pay tax above the basic rate, you may be able to claim extra relief through Self Assessment. How income tax bands work is covered in income tax explained.

Can you opt out, and what about a refund?

Yes. After you are enrolled you can leave the scheme. Gov.uk says that if you opt out within a month of your employer adding you, you get back any money you have already paid in. Opt out later and you may not be able to get your payments refunded. In that case your payments usually stay in the pension until you retire.

Opting out is not necessarily permanent. Your employer must re-enrol you every three years, counted from the date you first enrolled, or sooner if they choose. They will write to you when they do.

Whether to stay in or leave is a personal decision that depends on your circumstances. This guide does not recommend either.

What happens to your pension if you leave a job?

Gov.uk says your workplace pension still belongs to you. If you stop paying in, the money stays invested and you receive a pension when you reach the scheme’s pension age.

In a new job, you can join the new employer’s scheme. You may also be able to keep paying into the old scheme or combine the old and new schemes, though old scheme benefits might be limited to current workers, so it is worth asking the providers. In a defined benefit scheme for under two years, you may be able to get a refund of contributions or transfer the value, depending on the scheme’s rules.

Sources

• Who is enrolled (22 to State Pension age, £10,000, joining if not enrolled, employer pay floor, enrolment letter): gov.uk/workplace-pensions/joining-a-workplace-pension
• 2026/27 earnings trigger and qualifying earnings band, unchanged from 2025/26 (DWP review, published 18 December 2025): gov.uk review of the automatic enrolment earnings trigger and qualifying earnings band for 2026/27
• 5%, 3%, 8% and the £6,240 to £50,270 band; £80 example: gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay
• Opt-out window, refunds and three-year re-enrolment: gov.uk/workplace-pensions/if-you-want-to-leave-your-workplace-pension-scheme
• Tax relief, 20%, 80% and £2,880: gov.uk/tax-on-your-private-pension/pension-tax-relief
• Changing jobs: gov.uk/workplace-pensions/changing-jobs-and-taking-leave
• State Pension qualifying years and full weekly rate: gov.uk/new-state-pension and gov.uk/new-state-pension/what-youll-get

Tools and guides

• Take-home pay calculator: see what you keep after tax and National Insurance.
• What is a pension?: the basics of how UK pensions work.
• State Pension explained: qualifying years and the full rate.
• Income tax explained: bands, allowances and how tax is worked out.