Joining a workplace pension scheme

Most employers must provide a workplace scheme - Workplace pensions: Joining a workplace pension - GOV.UK

If you’re eligible, your employer should automatically enrol you into the scheme (the rules on eligibility are outlined below).

If you’re not eligible, you can still join but you need to arrange it with your employer.

If you’re eligible but don’t want to join, you can opt-out.

You might find that you’re not automatically enrolled when you first join your employer, but are enrolled later if your earnings increase. This could even be if your pay increases for just for one pay period.

If you’re an eligible jobholder (as defined below), you’ll be automatically enrolled into your employer’s workplace pension scheme.

Eligible jobholders:

• are aged between 22 and State Pension age
• earn over the earnings threshold (£10,000, see below) and
• work (mainly) in the UK and have a contract of employment (not a self-employed contractor); or have a contract to provide work and/or services personally (not sub-contracting to a third party).

Your employer must make contributions to the pension scheme, and you might also have to contribute.

If you don’t want to join the scheme, you can opt out.

By law, your employer must re-enrol you back into the scheme approximately every three years. This is as long as you still meet the eligibility criteria.

Your employer doesn’t have to contribute, although they might choose to.

Entitled workers:

• are aged between 16 and 74
• earn less than the lower earnings amount (£6,240 a year), and
• work (mainly) in the UK and have a contract of employment (not a self-employed contractor); or have a contract to provide work and/or services personally (not sub-contracting to a third party).

This means you don’t have any rights to join your employer’s workplace pension scheme.

But you can still save for your retirement by taking out a personal pension. 

The earnings threshold is £10,000 a year.

You’ll be assessed for eligibility at each pay period.

The earnings threshold will be pro-rated. This means the actual earnings threshold amount will differ if you’re paid monthly, four-weekly, fortnightly or weekly.

For example, if you’re paid monthly – you’ll meet the earnings threshold if your monthly earnings reach at least £833.

If you’re paid weekly, you’ll meet the earnings threshold if your weekly earnings reach at least £192.

As you’re assessed for eligibility at each pay period, you might find that you’re automatically enrolled if your earnings increase. This is even if it’s only for a short time.

The lower earnings amount is currently £6,240 a year.

But you’ll be assessed for eligibility at each pay period – and the lower earnings amount will be pro-rated.

As you’re assessed for eligibility at each pay period, you might find that you’re automatically enrolled if your earnings increase. This is even if it’s only for a short time.

For example, if you’re paid monthly, you’ll meet the lower earnings amount if your monthly earnings are £520.

If you’re paid weekly, you’ll meet the lower earnings amount if your weekly earnings are £120.

When you’ve been enrolled into the pension scheme, you have one calendar month to opt out and get a full refund of any contributions.

This is known as the opt-out period. It starts from whichever date is the later:

• the date active membership was achieved, or
• the date you received a letter from your employer with enrolment information.

You can’t opt out before the opt-out period starts or after it ends.

If you decide to leave the scheme after this time, whether you get a refund will depend on the pension scheme rules.

Before you do opt out, it’s worth considering the valuable benefits you might be giving up.

If you’ve got more than one job, each employer will check whether you’re an eligible jobholder.

If you are, you’ll be automatically enrolled. This means that you could be automatically enrolled into more than one workplace pension scheme.

If you’re not an eligible jobholder, you can still ask to join each employer’s workplace pension scheme.

Although you’ll be building up separate pension pots, you might be able to combine these at a later date. This could be if you leave one or more of your jobs, or when you start taking your pension.