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How much do I need to pay into my employees’ pension pots?

If the qualifying earnings basis is being used, the minimum contribution is 8% with at least 3% from the employer on qualifying earnings falling between upper and lower earnings limits of £6,240 and £50,270 a year. These payments are known as ‘contributions’ and are set by the government each year.

Minimum pension contributions have risen in stages starting from 6 April 2018. From 6 April 2019 minimum pension contributions have increased to 8% of employees’ qualifying earnings (3% employer, 4% employee and 1% tax relief).


What are qualifying schemes?

Not all pension schemes are suitable for automatic enrolment. The pension scheme you do use needs to meet certain qualifying criteria, which is why it’s referred to as a ‘qualifying pension scheme’.

If you’ve an existing pension scheme and you want to continue using it for automatic enrolment, you’ll need to check that it meets the qualifying criteria.

What penalties are there if I don’t comply?

The Pensions Regulator is responsible for ensuring compliance with the automatic enrolment legislation; where there’s a breach it’ll initially focus on education rather than imposing fines for non-compliance. If you don’t meet your duties, the Pension Regulator will initially just tell you to put things right. Any further failure may lead to the government fining you a lot of money. In the event of persistent and deliberate non-compliance, The Pensions Regulator can issue escalating penalty notices of up to £10,000 a day. And ultimately you could face criminal prosecution and even imprisonment.

What aren’t I allowed to do in relation to auto-enrolment?

The auto-enrolment obligations are set out in legislation and The Pensions Regulator is responsible for ensuring compliance with the rules. So to make sure you’re not breaking the law, it’s a good idea to make yourself aware of the main things you mustn’t do.
You mustn’t:
– Encourage employees to opt out or give up active membership of the pension scheme – this is known as ‘inducement’
– Coerce employees to opt out of the pension scheme
– Discriminate against employees seeking to join a pension scheme
– Take or fail to take any action that leads to an eligible employee ceasing to be an active member of a qualifying scheme, or that results in the pension scheme, of which they are a member, ceasing to be a qualifying scheme.
– Operate prohibited recruitment where a job applicant’s success of getting the job depends on whether or not they opt out.

What are the basic things I need to do to comply with auto-enrolment?

The auto-enrolment obligations are set out in legislation and The Pensions Regulator is responsible for ensuring compliance with the auto-enrolment legislation. So it’s a good idea to make yourself aware of your basic responsibilities.

You must:

  • Put employees into a pension scheme and pay into their pension pots
  • Provide a declaration of compliance to the Pensions Regulator for the pension scheme every three years
  • Keep details of all opt outs for four years
  • Keep specific records for each employee for six years.


What’s The Pensions Regulator (TPR)?

The Pensions Regulator enforces the auto-enrolment rules – this is the UK regulator of workplace pension schemes.

They give guidance to employers about what they need to do to meet their auto-enrolment duties.

I’m an employer – when will auto-enrolment affect me?

Your organisation will have a ‘staging date’ – this is when you need to start meeting your auto-enrolment duties. This is the date you have to work out which of your employees you must put into a pension scheme that can be used for auto- enrolment. Your staging date depends on the size of your largest PAYE scheme as at 1 April 2012. The Pensions Regulator will have written to you around 12 months ahead of your staging date.

All organisations which existed before 1 April 2012 have now passed their staging date. Employers who set up a new PAYE scheme between 1 April 2012 and 30 September 2017 are within the final staging phase. These employers will reach their staging date between 1 May 2017 and 1 February 2018, and their staging date will be determined by the date they’ve first paid income to any worker (see the table below)

PAYE income is first payable in respect of any worker  Staging date
From 1 April 2012 up to and including 31 March 2013 1 May 2017
From 1 April 2013 up to and including 31 March 2014 1 July 2017
From 1 April 2014 up to and including 31 March 2015 1 August 2017
From 1 April 2015 up to and including 31 December 2015 1 October 2017
From 1 January 2016 up to and including 30 September 2016 1 November 2017
From 1 October 2016 up to and including 30 June 2017 1 January 2018
From 1 July 2017 up to and including 30 September 2017 1 February 2018


I’m an employer – what’s auto-enrolment about?

The Government has brought some fundamental changes to workplace pensions and in 2012 introduced auto-enrolment. If you employ at least one person, you’ve a legal duty to offer a pension scheme that can be used for auto-enrolment.

  • You have to put certain employees into that pension scheme automatically. And you’ll need to pay money into their pension pots.
  • You need to let your other employees know they can join too.