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Since they were introduced in 2012 more than 88% of those eligible – 19.4 million people – have been automatically enrolled into workplace pensions.

Every business that employs staff who meet the criteria should be automatically enrolling workers into a pension scheme, deducting contributions from their wages, as well as making contributions on their behalf.

But who should be automatically enrolled into the pension scheme and can anyone else choose to join?  There are three different types of employees in terms of pensions so let’s look at each in turn.

Eligible jobholders

These are the workers between 22 years old and state pension age, earning over £10,000 per year., usually working within the UK.  If they are not already enrolled into a pension scheme then the employer must automatically enrol them into the workplace pension and start to make deductions and contributions on the employee’s behalf.

The employee can decide to opt out of the pension scheme, although it is illegal for the employer to offer any incentive to do so.  The employee can opt out of the scheme at any time, but they will only receive a refund if they opt out in the first month, after that any contributions will be kept in the pension pot to draw down in retirement.

Non-eligible jobholders

These are the workers who do not meet both of the criteria above.

So they could be between 16 and 21 or over retirement age, but earning over £10,000, or they are aged between 16 and 74 and have earnings between £6,136 and £10,000.

These workers can ask to join the scheme if they wish, and should the employer agree for them to join, they will have to make contributions on their behalf, but there is no obligation on the employer to let them join and contribute.

Entitled workers

An entitled worker will be aged between 16 and 74, and be earning less than lower earnings level, currently £6,240 in the 2021/22 tax year.

These workers can ask to join the scheme if they wish, but the employer does not need to allow them to join, and even if they do, they do not need to make contributions for them.

If you have any questions, please get in touch.