Auto-enrolment contributions for employees

The number of eligible employees saving into a workplace pension continues to rise through auto-enrolment.

According to the Department for Work and Pensions, 15.1 million people participated in a workplace pension in 2015, an increase of 4.4 million since 2012.

If you’re 22 or over, earning at least £10,000 and normally work in the UK, you will be automatically enrolled in a workplace pension scheme by your employer.

Some employers have already begun auto-enrolment but others are yet to start. All employers will have to offer a workplace pension scheme by 2018.

Impact on savings

Workers will benefit from pension contributions from their employer. The government also contributes in the form of tax relief on employee contributions. 

Research has found that the total amount saved in a workplace pension by employees reached almost £82 billion in 2015.

Further findings:

  • the total amount saved in the public and private sector has increased by £0.9 billion and £0.6 billion respectively since 2014
  • the total average contributions for workers at large and medium private sector employers rose from 7% to 8.1% in 2015.

Pension contributions

The minimum total contribution to a workplace pension scheme is based on your qualifying earnings. The rates are set to rise from April 2018.

Date Minimum employee contribution Minimum employer contribution
Before April 2018 1% 1%
April 2018 - April 2019 3% 2%
After April 2019 5% 3%

Other options

While the majority of employees are actively contributing and saving in a workplace pension, individuals can choose to opt out of their employer’s scheme.

You may choose to explore other options depending on your situation– either as an alternative to auto-enrolment or in addition to your contributions.

Some of the alternative options available to workers include:

  • personal pensions
  • ISAs
  • other savings and investments.

We can provide support and advice on your retirement planning.