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Automatic Enrolment

Overview For Employers

In October 2012, new rules came into force that mean you will be required to automatically enrol your eligible jobholders into a workplace pension scheme that meets certain requirements, and to deduct and pay contributions for them.

The new rules affects the largest employers first, but will cover even the smallest employers by April 2017. The Pensions Regulator will write to you 12 months before your business must comply with the new requirements.

However, it is never too early to familiarise yourself with the new workforce pension reform rules and to start planning.

The informaton
on this page is based
on NFU Mutual's
understanding of legislation and practice as at
6th April 2014, which is subject to change.

How will the changes affect my business?

All UK employers with at least one worker will have to comply with the legislation.  In particular, the new duties mean you will need to make at least a minimum level of contributions on behalf of some or all of your workers.

By October 2018 employers and enrolled workers will have to contribute a combined minimum of 8% of qualifying earnings between the lower and upper limits (between £5,772 and £41,895 for 2014/15).

Employees can opt-out but must be re-enrolled into the scheme every 3 years, or on joining a new employer.

When will the changes take effect?

Automatic enrolment is being introduced in stages from October 2012, with the largest employers having to comply first:

PAYE scheme size Staging date
160-249 1st April 2014
90-159 1st May 2014
62-89 1st July 2014
61 1st August 2014
1st October 2014
59 1st November 2014
58 1st January 2015
54-57 1st March 2015
50-53 1st April 2015
40-49 1st August 2015
30-39 1st October 2015
Fewer than 30 June 2015 - April 2017
New employers from April 2012 up to September 2017 - timings depend on when PAYE income was first payable May 2017 - February 2018
New employers from October 2017 onwards Immediately

Staging dates are based on the number of staff HMRC deemed an employer to have on 1 April 2012. Each employer can find out their own staging date by entering their PAYE number on the Pensions Regulator's website.

What do employers have to do to comply?

  • Ensure that there is a qualifying scheme set up to accept the contributions.
  • Ensure that all eligible employees are automatically enrolled in to the scheme (all new eligible employees must be automatically enrolled within one month of joining the company).
  • Pay employer and employee contributions to the scheme - based on a band of qualifying earnings.

Contributions will be phased in as follows:

Staging phase Employer Jobholder* Total
Staging date to 30th September 2017 1% 1% 2%
1st October 2017 to 30th September 2018 2% 3% 5%
1st October 2018 onwards 3% 5% 8%

* Includes tax relief. Tax treatment is dependent on individual circumstances and may be subject to change in the future.

How do I choose a scheme?

There are criteria to be met for a scheme to meet the auto-enrolment requirements so if you already offer a scheme to your employees you must make sure that it complies with the requirements.

The requirements of each employer will be different so it is important to look at all of the options.

How much will automatic enrolment cost?

Costs will vary depending on a number of factors but will include the cost of the contribution itself and the administration costs associated with implementing automatic enrolment into your current processes. Once the phasing of contribution is complete in 2018, an employer will need to make a minimum contribution of £636.84* per year for an employee earning the national average earnings of £27,000 **.

* Calculated using the 2014-2015 automatic enrolment earning thresholds.
** Source: Office for National Statistics Annual Survey of Hours and Earnings 2013.

Take the time
to talk to us

You need to start thinking about your business strategy to ensure you comply with automatic enrolment requirements. We can help you manage the changes*.


* Please note

When you contact us we'll explain the advice services we offer and our charges. NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers.

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