Employer Responsibilities in the UK: How to Properly Enrol Employees in a Pension Scheme (Auto-Enrolment)

Every employer in the UK is legally required to provide their employees with access to a workplace pension scheme. Since 2016, most businesses – regardless of size – must follow the rules of so-called auto-enrolment.

Below is a step-by-step guide on what you need to do to comply with the regulations.

Who qualifies for auto-enrolment?

You must automatically enrol every employee who:

• Is at least 22 years old and under State Pension Age,
• Earns at least £10,000 per year (or the equivalent monthly/weekly amount),
• Works under a contract where you, as the employer, control the terms and conditions of employment.

Employees who do not meet these criteria can opt in voluntarily. In some cases, you may not be required to contribute as an employer, but you still have other responsibilities.

Employer Responsibilities – Step by Step

1. Choose a Pension Scheme
   You can use widely available options like NEST, The People’s Pension, NOW: Pensions, etc
   
   
2. Enrol Employees
   Enrol eligible employees into the chosen pension scheme within the required time frame
   
   
3. Pay Contributions Regularly
   The minimum contribution rates are:
   
   • 3% – Employer,
   • 5% – Employee.
     
     
4. Inform your Employees
   Each employee must receive written information explaining:
   
   • How the scheme works,
   • Contribution amounts,
   • Their right to opt out.
     
     
5. Notify The Pensions Regulator
   You must complete the Declaration of Compliance, confirming that you meet all legal duties.
   After registering your company as an employer, you will receive a letter from The Pensions Regulator – do not ignore it, as it contains important deadlines and instructions.
   
   
6. Maintain Records
   Keep documentation related to:
   
   • Employment details,
   • Pension contributions,
   • All correspondence about the pension scheme.
     
     

Consequences of Non-Compliance

Failure to fulfil your auto-enrolment duties may result in financial penalties from The Pensions Regulator – ranging from a few hundred to several thousand pounds, depending on the extent and duration of the breach.

Summary

Auto-enrolment rules are mandatory and apply to the vast majority of UK employers.
If you’re unsure about your obligations, consult an accountant or visit The Pensions Regulator’s website for more information.

MJ Books supports small businesses in meeting their employer responsibilities – including all aspects of auto-enrolment.
Contact us if you need assistance.