What is auto enrolment?

It’s a way of encouraging more people to save for when they want to stop working and retire. The Government made it law for all companies to automatically enrol certain employees into a pension scheme. This means that if you’re eligible you’ll only be asked if you want to opt out of the scheme, rather than if you want to join.

Who is eligible for auto enrolment?

If you’re aged between 22 and State Pension Age and earn at least £10,000 a year then you will be automatically enrolled into a pension plan. You’ll sometimes see this referred to as being an ‘eligible jobholder’.

If you find you haven’t been automatically enrolled, it’s because you’re either classed as a ‘non eligible job holder’ or an ‘entitled worker’. Whether you are a non eligible job holder or entitled worker will depend on your age and how much you earn. 

As a non-eligible jobholder, you can still opt into the workplace pension if you want to. An ‘entitled worker’ can be enrolled but may not receive contributions from their employer. 

The amount you and your Employer must pay each month is shown as a percentage of your pensionable earnings (these are the earnings your payments are based on). You should have received correspondence from your employer confirming your contribution levels. You might also want to check and see if you can increase the amount you are saving. Some employers increase their contributions if you also pay more into your pension pot – it’s worth checking with your employer if this is something they offer.

What does it mean for me?

It means that if you’re eligible you’ll be automatically enrolled into your TPT Scheme if:

• You're new to your Company
• You're an existing employee who has either previously opted out of the Scheme, or were previously not eligible to join because of your age or earnings level.

If you're automatically enrolled, contributions are paid into your pension as set out by the Government’s legislation.

Do you have enhanced or fixed protection?

If you have built up pension savings above the Lifetime Allowance and have enhanced or fixed protection, then you may lose this protection if you are automatically enrolled. If you have this protection, make sure you take appropriate action, so you don’t lose it. 

Further information

You may find the information sources from The Pensions Regulator useful if you are an individual employee looking for information on workplace pension issues such as auto enrolment, potential pension scams or other pension options.