Auto-enrollment has been phased in over a number of years (depending on the employer’s size) but from 2018, all workers have to be automatically enrolled in their employer’s pension scheme.
For anyone that is eligible, employers will have to make contributions to their workers’ pensions every pay period. This will apply to all workers and employees aged over 22 and of State Pension age, earning at least £10,000 and working in the UK. Workers will have a month to choose not to join the workplace pension, known as an “opt out”. Employers must be careful not to unfairly dismiss or discriminate against employees for being in a workplace pension scheme and cannot encourage their workers, or force them, to opt out.
If the worker takes no action, they will be enrolled in the workplace pension scheme. Workers will then continue to make contributions to their retirement pot from their pay for as long as they are employed or until they take their money out.
If an individual pays income tax and pays into a personal or workplace pension, then the government will also add money to a worker’s workplace pension in the form of tax relief.