Automatic enrolment into pensions is a crucial aspect of employment, placing duties on employers to enrol eligible workers into a workplace pension scheme. The incentive is designed to ensure workers have access to a workplace pension scheme, allowing them to save over the duration of their career, working towards retirement.  

How does it work?  

On their first day, employers must automatically enrol all employees who meet the following conditions: 

  • Aged between 22 and the State Pension age (you can work out your State Pension age here) 
  • Working in the UK 
  • Earning over £10,000 a year (2024/25) 

As an employer, you are required to write to all eligible employees explaining: 

  • The date they were added to the scheme; 
  • The type of pension  
  • How much they will contribute; 
  • Advising that they can opt out whenever they want to. 

Postponement of Pension Scheme  

Employers have the option to legitimately postpone offering a pension scheme to their staff for a period of up to three months. Postponement can be utilised in various scenarios, such as: 

  • From the date an employee first becomes eligible for auto-enrolment (e.g., when they turn 22), or 
  • On the first day of employment. 

If opting for postponement, employers should notify affected employees in writing. This communication should inform employees of the postponement period and their right to opt into the pension scheme during this time. 

Postponement can offer flexibility for employers in managing their pension obligations and ensures compliance with regulatory requirements. 

 Opting out and re-enrolment in Pension Scheme 

Once automatically enrolled, employees have one month to choose to ‘opt out’ of the pension scheme. If they opt out during this period, contributions made should be refunded. However, if they opt out after a month, contributions typically remain in their pension pot. 

Employers should be aware that employees have the option to ask to re-join the scheme at a later date. However, employers may choose to limit re-joining to once every 12 months. 

Additionally, employers should note that even if employees do not ask to re-join, they will be automatically re-enrolled into the scheme by the employer every three years. This process, known as re-enrolment, ensures ongoing compliance with pension regulations. 

Penalties for non-compliance 

Employers failing to meet their legal obligations may face enforcement measures from The Pensions Regulator (TPR). TPR possesses various enforcement powers, including issuing warning letters, statutory notices, and imposing financial penalties. These penalties range from a fixed penalty of £400 to daily escalating fines ranging from £50 to £10,000, depending on workforce size. In severe instances, criminal prosecution may be pursued by the Regulator. 


At Fiander Tovell, our outsourced payroll services include making sure that your company complies with auto-enrolment regulations. We understand that automatic enrolment for pensions is not straightforward. Our team can help you to manage automatic enrolment, specifically making sure you comply with the requirements to avoid any errors or compliancy matters. This includes help with the maintenance of records which enable you to prove that you have complied with your duties as the employer.  

 If you feel as though you need assistance or guidance, don’t hesitate to contact our Commercial Client Director, Fabrice Legris, at for more information.