Workplace Pension UK: Auto-Enrolment, Contributions, and What Your Employer Owes You

Since 2012, every UK employer must automatically enrol eligible workers into a workplace pension. If you are aged 22-66 and earn over £10,000, your employer must sign you up and contribute at least 3% of your qualifying earnings. You put in at least 5% (which includes tax relief), bringing the total minimum to 8%.

Your contributions benefit from tax relief. A basic-rate taxpayer contributing £100 only sees £80 leave their pay packet, because the pension provider claims the other £20 from HMRC. Higher-rate taxpayers can claim additional relief through Self Assessment.

Matching contributions are what most people miss. Many employers will only put in the minimum 3% unless you ask for more. If your employer offers to match above that, say they will contribute 5% if you put in 5%, take every penny of it. That is money you get before a single investment is made.

You can opt out, and the process is straightforward. But opting out means giving up your employer's contribution, which is part of your pay. The fact that money is tight is often the exact reason not to opt out; the employer contribution is money you are entitled to that you will not get back in your salary instead. If you do opt out, your employer must re-enrol you every three years, and you can opt out again each time.