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WORKPLACE PENSIONS – Automatic Enrolment

You’ve probably heard of the government’s new workplace pensions initiative on the TV or radio.  The government wants to make it easier for employees to start saving toward their retirement so they have brought in new laws that require all employers to automatically enrol their staff in to a workplace pension scheme.  Employers are now required by law to provide a pension scheme for all staff who fit the following criteria:

  • Don’t already have a workplace pension

  • Are aged between 22 and State Pension Age

  • Earn more than £10,000 per year (this figure will change each year)

  • Work in the UK

Can workers opt out?

Even if your workers don’t want to be enrolled, they still need to be automatically enrolled by law. They can then opt out within the first month and receive back any deductions they have paid.  

If they choose to opt out later than this, they can do so, but the contributions they have made cannot be returned. Thereafter they must be re-enrolled every three years.  As an employer, you are required to provide a pension scheme at all times, whether or not any of your workers are currently enrolled.

What pension scheme could you use?

There are various workplace pension schemes available that suit various needs such as NEST (National Employment Savings Trust) set up by the government, or privately run schemes such as Smart Pensions. After researching various products we have partnered with Smart Pensions, or NEST where requested by the employer. Smart Pensions have no set-up or running costs for the employer and the annual fees for the members (employees) of the pension scheme are some of the lowest available. Many professional firms are working with Smart Pensions and they are well established to help you meet your employer responsibilities.

What are the costs of setting up and managing the pension scheme?

As you can appreciate, setting up a pension scheme, enrolling employees and running the scheme will incur time and costs from us.

For our payroll clients, we do not charge for establishing and managing the pension scheme. We will meet with you, assess the workforce and set up the pension scheme.  We ensure that all of your legal duties are fulfilled, including notifying all of your employees of the scheme in writing, dealing with them directly for opting in/opting out and completing your declaration of compliance with the pension regulator. Once the pension scheme is up and running it runs alongside the payroll and does not incur any further charges.

What penalties could employers face if they don't comply?

Employers must not take action to try to stop employees from enrolling in the pension scheme.

This could be in the form of acting to discourage existing employees from auto enrolment or making it clear when hiring new employees that those who wish to be auto enrolled will be considered unfavourably.


If you fail to comply with statutory notices, you may be issued with a fixed penalty notice. These types of penalties are set at £400.  

Another option for The Pensions Regulator is to issue an escalating penalty. These types of penalties will vary depending on the number of staff you employ i.e. if you employ a high number of staff then the penalty will be much higher. These penalties range from £50 to £10,000 per day.

An alternative penalty at the disposal of The Pensions Regulator is the civil penalty. This penalty may be utilised if you fail to pay the contributions that you owe your staff when they contribute to their pension scheme. This penalty can be up to £5,000 for individuals, i.e. business owners or managers. There can also be fines of up to £50,000 for the company itself.


The final option that The Pensions Regulator can call upon is the ‘Prohibited Recruitment Conduct Penalty Notice’. The severity of this penalty varies depending on how many staff are employed in the company and can range from £1,000 to £5,000.

What are employers required to do?

Here is a brief overview of requirements. This should not be considered a comprehensive guide.

A complete guide can be found on the Pension Regulators website.

  • Assess the workforce and check who to enrol

  • Choose a pension provider and set up a scheme

  • Write to all workers to notify them of enrolment. Any workers who are not automatically enrolled must be notified so that they can opt in to a scheme should they wish to do so.

  • Enroll workers at enrolment date.

  • Check eligibility of workers each payroll date and enrol any that become eligible.

  • Complete the declaration of compliance with the pension regulator.

  • Re-enrol all workers every three years.

Payroll Services

We provide our clients with a comprehensive payroll service. We can set up and run weekly, fortnightly or monthly payroll and manage your workplace pension scheme too.

Depending our your preference, we can provide employees with paper or email payslips.


Fees for clients with 3 or fewer employees:

  • £15 per month for a monthly payroll

  • £25 per month for a weekly payroll

For additional employees we will assess the workload and provide you with a tailored quote.