Do I have to offer a workplace pension if I only have one employee?

Yes. Auto-enrolment applies to all employers regardless of size. If your one employee is an eligible jobholder (aged 22 to state pension age, earning over £10,000 per year), you must automatically enrol them and pay minimum employer contributions of 3%.

What if my employee does not want to be in the pension scheme?

You must still enrol them automatically. They then have a 1-month opt-out window during which they can choose to leave the scheme and receive a full refund of their contributions. You must not encourage or suggest that they opt out. After 3 years, you must re-enrol them again.

Can I offer more than the minimum contributions?

Yes, and many employers do. Enhanced employer contributions are a valuable recruitment and retention tool. You can contribute any amount above the 3% minimum. Some employers match employee contributions up to a certain level (e.g., employer matches up to 5% if the employee also contributes 5%).

When do contributions have to be paid to the pension provider?

Contributions must reach the pension provider by the 22nd of the month following the month in which they were deducted from the employee pay (or by the 19th if paying by cheque). Late payment is a compliance failure that The Pensions Regulator monitors.

What is NEST and do I have to use it?

NEST (National Employment Savings Trust) is the government-backed workplace pension scheme. You do not have to use NEST -- you can choose any qualifying pension scheme. However, NEST has a legal duty to accept all employers, making it the default option if you cannot find or are rejected by another provider.

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Compliance & Legal

Workplace Pension Auto-Enrolment: UK Employer Guide [2026]

Every UK employer must automatically enrol eligible workers into a workplace pension scheme. This guide covers your duties, contribution rates, who you must enrol, how to handle opt-outs, and what happens if you get it wrong.

The Grove Team

Grove HR

23 February 202612 min read

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Quick Answer: What Are My Auto-Enrolment Duties?

You must automatically enrol all eligible jobholders (aged 22 to state pension age, earning over £10,000 per year) into a qualifying workplace pension scheme. Minimum contributions are 3% employer and 5% employee (8% total) on qualifying earnings between £6,240 and £50,270 (2025/26 thresholds).

Worker Category	Age	Earnings	Auto-Enrol?	Employer Contribution
Eligible jobholder	22 to SPA	Over £10,000/year	Yes -- mandatory	Minimum 3%
Non-eligible jobholder	16-21 or SPA-74	Over £6,240/year	No -- but they can opt in	Minimum 3% if they opt in
Entitled worker	16-74	Under £6,240/year	No -- but they can join	No employer contribution required

Understanding the Contribution Rates

Current Minimum Contributions (2025/26)

Element	Minimum Rate	Based On
Employer contribution	3%	Qualifying earnings
Employee contribution	5% (including tax relief)	Qualifying earnings
Total minimum	8%	Qualifying earnings

Qualifying Earnings (2025/26)

Contributions are calculated on qualifying earnings -- the band of earnings between the lower and upper thresholds:

Threshold	Annual	Monthly	Weekly
Lower earnings threshold	£6,240	£520	£120
Upper earnings threshold	£50,270	£4,189	£967

Example: An employee earning £30,000 per year has qualifying earnings of £30,000 - £6,240 = £23,760. Minimum employer contribution: £23,760 x 3% = £712.80 per year (£59.40 per month).

Alternative Certification Methods

Some employers prefer to calculate contributions differently. The Pensions Regulator allows three alternative sets of requirements:

Set	Pensionable Pay	Minimum Total	Minimum Employer
Set 1	Basic pay	9%	4%
Set 2	Total pay (including overtime, bonuses)	8%	3%
Set 3	Total pay above the lower threshold	7%	3% (some restrictions)

Step-by-Step: Setting Up Auto-Enrolment

1. Know Your Duties Start Date

New employers: Your duties begin when you first employ someone
Existing employers: You should already be compliant (auto-enrolment was fully phased in by February 2018)

2. Choose a Pension Scheme

Your scheme must be a qualifying scheme, meaning it meets the minimum requirements. Options include:

NEST (National Employment Savings Trust) -- the government-backed scheme that must accept all employers
The People's Pension -- a popular multi-employer scheme
NOW: Pensions -- another large auto-enrolment provider
Smart Pension -- technology-focused provider
Group personal pension -- offered by insurance companies
Your own trust-based scheme -- for larger employers

NEST is the default option for employers who cannot find another provider, as it has a legal obligation to accept all employers.

3. Assess Your Workforce

On your staging date (or when a new employee joins), you must assess each worker and categorise them as an eligible jobholder, non-eligible jobholder, or entitled worker.

4. Enrol Eligible Jobholders

Enrol them into the scheme automatically -- you do not need their consent
Provide them with enrolment information within 6 weeks
Start deducting and paying contributions from the enrolment date

5. Write to All Workers

You must write to every worker explaining:

Eligible jobholders: That they have been enrolled, what the scheme is, contribution rates, and their right to opt out
Non-eligible jobholders: Their right to opt in to the scheme
Entitled workers: Their right to join a pension scheme (employer contribution not required)

Handling Opt-Outs

Employees have the right to opt out of the pension scheme, but there are strict rules:

Opt-Out Rule	Detail
Opt-out window	1 calendar month from enrolment (or from receiving enrolment information, if later)
Refund	Employee contributions must be refunded in full if they opt out within the window
Employer inducement	It is a criminal offence to encourage or induce an employee to opt out
Re-enrolment	You must re-enrol opt-outs every 3 years on your re-enrolment date

What You Must Not Do

Do not suggest, encourage, or pressure anyone to opt out
Do not provide opt-out forms proactively (direct them to the pension provider)
Do not offer higher pay in exchange for opting out
Do not make opt-out a condition of employment
These are criminal offences carrying unlimited fines

Re-Enrolment

Every 3 years, you must re-enrol any eligible jobholders who previously opted out or left the scheme. This is called cyclical re-enrolment.

Your re-enrolment date is the 3rd anniversary of your staging date (and every 3 years after)
You have a 6-month window (3 months before to 3 months after) to choose your re-enrolment date
You must assess all workers again at the chosen date
Re-enrolled workers can opt out again, and the cycle continues

Record Keeping and Compliance

Records You Must Keep

Record	Retention Period
Names and addresses of enrolled workers	6 years
Opt-out notices	4 years
Contributions paid	6 years
Enrolment and re-enrolment dates	6 years
Pension scheme reference/membership numbers	6 years

Declaration of Compliance

You must complete a declaration of compliance with The Pensions Regulator within 5 months of your duties start date. This confirms you have met your auto-enrolment obligations.

Penalties for Non-Compliance

The Pensions Regulator has significant enforcement powers:

Penalty	Trigger
Fixed penalty notice	£400 for failing to comply with a compliance notice
Escalating daily penalty	£50-£10,000 per day (depending on employer size)
Criminal prosecution	For inducing opt-outs or repeated serious non-compliance
Prohibited recruitment conduct	Criminal offence to make pension opt-out a condition of a job offer

Common Employer Mistakes

Not enrolling workers from day one -- eligible jobholders must be enrolled from their first day of qualifying earnings
Using the wrong earnings threshold -- thresholds change each April
Failing to re-enrol opted-out workers every 3 years
Paying contributions late -- contributions must reach the pension provider by the 22nd of the month following deduction (or 19th if paying by cheque)
Not completing the declaration of compliance -- this must be done even if you have no eligible workers
Encouraging opt-outs -- this is a criminal offence, even informally

Using Grove to Manage Auto-Enrolment

Grove tracks employee eligibility automatically, flags when workers become eligible for enrolment, and reminds you of your re-enrolment dates. Integrate with your payroll to ensure contributions are calculated and paid correctly every month.

Get started with Grove and simplify your workplace pension administration.

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