UK: Pensions Auto-Enrolment - An overview For HR Professionals

Last Updated: 9 January 2013
Article by Douglas Styles

Before the new auto-enrolment duties came into effect, there was no requirement in law for a UK employer to contribute to a pension scheme in respect of its employees. However, an employer with five or more employees was, until 1 October 2012, generally obliged to designate and facilitate access to a stakeholder pension. From 1 October 2012, the statutory duty on an employer to designate a stakeholder pension scheme was repealed. The effect is that UK employers are not obliged to provide access to any pension scheme until they have reached their staging date (see below).

Once an employer has reached its staging date, it must ensure that all its eligible jobholders are auto-enrolled into a qualifying scheme from their automatic enrolment date ("AED"), unless they are already active members of the employer's qualifying schemes. The duty to automatically enrol arises under statute and there is no change to a jobholder's terms of employment requiring any consultation with jobholders.

An employer will be obliged to auto-enrol eligible jobholders in an automatic enrolment scheme, unless they are already active members of the employers qualifying scheme. Employers may also use 'NEST', a central scheme set up by the UK government. Several private pension providers have also established competitive schemes.

An employer's obligations under the auto-enrolment regime will apply in respect of "workers who work, or ordinarily work in the UK". The definition of worker in section 88 of the Pensions Act 2008 is broadly the same as under section 230(3)(b) of the Employments Rights Act 1996, which provides that, a "worker" means "an individual who has entered into or works under...(a) a contract of employment or (b) any other contract, whether express or implied...oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose statue is not by virtue of the contract that of a client or customer of any profession of business undertaking carried on by the individual and any reference to a worker's contract shall be construed accordingly."

It will often be easy to identify whether someone is a worker, as they will satisfy the above criteria. However, employers should not rely solely on a person's tax status as to whether they are a worker. An individual who is considered by HMRC to be self-employed for tax purposes may still be classed as a worker for the purposes of the Pensions Act if they work under a worker's contract.

There are three types of 'workers' under the auto-enrolment regimes:

  1. "eligible" jobholders, who must be automatically enrolled in an automatic enrolment scheme and are entitled to minimum employer contribution. An eligible jobholder can opt out of a pension scheme in which they had not been enrolled;
  2. "non-eligible" jobholders, who have the right of joining a scheme and are entitled to minimum employer contributions; and
  3. "entitled" workers who have the right of joining an employee qualifying scheme but are not entitled to receive employer contributions.

Employers are expressly restricted from "prohibitive recruitment conduct" and offers of inducements to opt out of an auto-enrolment scheme. Employers are also under a duty to provide certain written information relating to the auto-enrolment regime. The Pensions Regulator which governs compliance with the new employer duties, has published online guidance with respect to these reforms. This includes guidance notes aimed at pension professionals, which may also be useful for HR professionals. For more information go to

As a general rule, an employer is required to auto-enrol an eligible jobholder in an automatic enrolment scheme and provide the prescribed information about the scheme within one month from the job holder's AED. The jobholder's AED may simply be the date on which they start employment or, it could be the employer's staging date if the jobholder is employed on that date. However, there will likely be cases where a jobholder's AED will be later than this, for example, where a jobholder is a low-earner and does not receive earnings that exceed the earnings trigger in the first pay reference period. An employer can defer auto-enrolling an eligible jobholder by up to three months from the AED, known as a "postponement".

Once auto-enrolment has occurred, an employer has a duty to make a minimum contribution to an automatic enrolment scheme. An employer using a defined contribution ("DC") pension scheme for auto-enrolment will be required to pay a minimum of 3% of a jobholder's qualifying earnings into the scheme each year. The overall contributions to a DC scheme must be no less than 8% of the jobholder's qualifying earnings and this means that jobholders will be required to contribute 5% of the qualifying earnings. There are transitional periods which allow the full rates of employer and jobholder contributions to be phased in over six years.

To ease the compliance burden, staging dates for small businesses have been delayed and, broadly speaking, employers with between 50 and 249 workers have been assigned revised staging days, running from 1 April 2014 to 1 April 2015. Employers with fewer than 50 workers have been given staging dates between 1 April 2015 and 1 April 2017. New businesses have staging dates at the end of the overall timetable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.