Auto-enrolment basics
Since 2012, UK employers have been legally required to automatically enrol eligible workers into a workplace pension. To qualify for auto-enrolment in 2026/27 you must:
- Be aged 22 or over (and under State Pension age)
- Earn at least £10,000 a year (the auto-enrolment earnings trigger)
- Work in the UK
You can opt out within one month if you don't want to participate, but you'll be re-enrolled every 3 years if you remain eligible — employers must reassess regularly.
Statutory minimum contributions
The minimum total contribution to a workplace pension is 8% of qualifying earnings, split:
- You: 5% (subject to your opt-out)
- Your employer: 3%
Qualifying earnings are the band between £6,240 and £50,270 (the auto-enrolment thresholds). So if you earn £30,000, qualifying earnings are £30,000 − £6,240 = £23,760, and 5% of that = £1,188 you'd contribute.
Many employers offer higher contributions, often as a match. A common pattern is "we'll match up to 5%" — meaning if you contribute 5%, they contribute 5% too, for a total 10% going into your pension. Always check your employer's specific scheme.
The three mechanisms
Workplace pensions use one of three tax-relief mechanisms:
- Salary sacrifice — most tax-efficient; the contribution skips Income Tax AND NI
- Net pay arrangement — contribution skips Income Tax (but you still pay NI)
- Relief at source — contribution comes from take-home; provider claims 20% basic-rate relief automatically
Most modern workplace pensions use either net pay or relief at source. Salary sacrifice is increasingly common in tech and financial services but less common in smaller employers and the public sector.
Choosing between schemes
You generally don't get to choose your workplace pension — your employer picks the scheme. But you usually do get to choose:
- Your contribution rate (above the statutory minimum)
- Investment choice within the scheme (most providers offer 5–15 funds, often with a default lifestyle option)
- Whether to use any salary sacrifice option
For workers with multiple jobs or those starting work later in life, a personal pension (SIPP) can run alongside the workplace pension — but you'd lose any employer match by routing contributions away from the workplace scheme. The standard advice is "always claim the full employer match first."
What happens when you leave a job
Your workplace pension stays in the scheme. You can:
- Leave it where it is — the pension grows under the scheme's rules, but you stop contributing
- Transfer it into your new employer's scheme
- Transfer it into a personal pension or SIPP for consolidation
After multiple jobs, many people have a collection of small pension pots from previous employers. The Pension Tracing Service helps locate forgotten pensions; consolidation isn't automatic.