Frequently asked questions about automatic enrolment

I’m self-employed. Does automatic enrolment apply to me?

If you’re self-employed, you’re not required by law to enrol yourself into a workplace pension. But it's a good idea to think about what income you’ll have to live on when you retire.

You might want to plan for your later life if you haven’t already – for example, starting a pension scheme.

You could choose a:

These are all available from a variety of pension providers.

You might also decide to join NEST (the National Employment Savings Trust) – an independent body set up by government to provide a pension scheme.

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I’m the only director and employee of a limited company. How does automatic enrolment affect me?

You’re one of the few classes of worker who don’t have to be automatically enrolled into a workplace pension scheme. But you can still decide to set one up if you want.

It’s important to think about what income you’ll have to live on when you retire – and whether you need to start, or increase, retirement savings.

I am on a zero-hours contract. How will I be treated?

You’ll be automatically enrolled in the same way as other workers if you earn more than:

  • £192 a week
  • £833 a month, or
  • £10,000 a year.

(2021-22 figures)

You need to also meet the other joining conditions.

I didn’t qualify for automatic enrolment because I didn’t earn enough. But I’ve had a pay rise backdated which makes me eligible for automatic enrolment. Should my membership be backdated in line with my backdated pay rise?

If you received a backdated pay rise that takes you over the £192 a week or £833 a month earnings threshold amounts? Then you should be automatically enrolled when you receive the pay rise – provided you meet the other joining conditions.

Your first contribution should be higher than later ones, to reflect the backdated pay rise.

My employer didn’t enrol me and has now gone into administration. Am I entitled to pension contributions?

If you qualified to join but your employer didn’t automatically enrol you? Then contact the Pensions Regulator as soon as possible:

How is maternity or paternity pay treated?

If you’re receiving maternity or paternity pay, you’ll be assessed on the basis of your pre-maternity pay. 

If you earn more than £192 a week or £833 a month – and meet the other joining conditions – you’ll be automatically enrolled.

What is re-enrolment?

Around every three years your employer has to re-enrol any eligible workers, who have previously opted out, into an automatic enrolment pension scheme. Re-enrolment at the chosen date is essentially the same as enrolment at your employer’s staging date.

Your employer can’t use postponement. This is when they can delay  putting you into a pension scheme for up to three months. 

They must arrange for qualifying pension scheme membership to start from the re-enrolment date.

You can still opt out if you don’t want to become a member.

Will I get tax relief on my contributions?

Generally, if you're an employee who earns more than the standard personal allowance £12,570 in the tax year 2021/22), you’ll receive tax relief on your contributions.

You’ll need to check with your scheme how this works for you and if you need to do anything to claim all the tax relief you’re entitled to.

If you earn less than the standard personal allowance and so don’t pay tax, then you won’t get receive tax relief if your employer operates a ‘net pay’ scheme.

If your workplace scheme operates under ‘relief at source’ – you’ll receive basic (20%) tax relief on your contributions. This is regardless of your level of pay.

If you’re affected by this, you can check with your employer what type of scheme they offer and if they would be willing to change to a relief at source scheme.

Be aware that your employer has to use the same method for all employees in the scheme. 

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I can’t afford my 5% contributions. Can I choose to reduce my contributions?

This depends on your individual arrangement, so you’ll need to discuss this with your employer.  

If you’re able to reduce your contributions and the total contributions fall below 8% – you’ll no longer be in a qualifying automatic enrolment scheme.

This will trigger the re-enrolment process.

This means your employer has to automatically re-enrol you if you're an eligible worker. This happens approximately every three years if you’re not a member of a qualifying scheme.

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MoneyHelper is the new, easy way to get clear, free,
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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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