Do I need to auto-enrol myself as a director?

A sole director with no other employees is exempt from auto-enrolment. If you are a director who also has a contract of employment (i.e. you are also an employee of your own company), you must be assessed like any other worker. Most owner-managed companies have the director as both director and employee, so the assessment applies.

What happens if I miss the auto-enrolment deadline?

The Pensions Regulator can issue a fixed penalty notice of £400 for failing to comply. Escalating daily fines apply for continued non-compliance — £50–£10,000 per day depending on the number of employees. The Regulator is active in enforcement, particularly for small employers.

Can employees opt out of the pension?

Yes. Employees can opt out within one month of being enrolled. If they opt out within this window, any contributions deducted must be refunded. You must re-enrol opted-out workers every 3 years — they can opt out again, but you must go through the process.

What are qualifying earnings?

For 2026/27, qualifying earnings are the portion of an employee's earnings between £6,240 and £50,270 per year. Minimum contributions are calculated on this band, not on total earnings. Some employers use total earnings instead where the total contribution meets the minimum; check current Pensions Regulator guidance.

Is NEST the best pension provider for small businesses?

NEST is the most commonly used provider for small employers because it accepts all employers, has no minimum size requirement, and cannot refuse you. Its charges are low and it integrates with most payroll software. For most new employers, NEST is the simplest and safest choice.

Pension Auto-Enrolment for UK Employers (2026)

UK Startup Payroll Desk· 2026/27 pension basis checked 27 August 2026Last updated 27 August 2026Check the cited official sources before acting.

Workplace pension auto-enrolment was introduced in 2012 and has been one of the most successful policy changes in UK retirement saving. For employers, it creates a set of legal obligations that apply from the moment you take on your first member of staff. This guide explains the rules, the contribution rates, and how to choose a pension provider.

Direct answer

Auto-enrolment is not optional. Every UK employer — including sole directors paying themselves a salary — must assess their staff and enrol eligible workers in a workplace pension. Here is how to do it correctly.

Minimum employer contribution: 3% of qualifying earnings
Minimum total contribution: 8% (employer + employee)
Earnings trigger: £10,000 per year
Age range: 22–66 for auto-enrolment

Checklist

Quick checklist

Confirm your duties start date with The Pensions Regulator
Assess all workers on their start date
Choose a qualifying pension scheme (NEST is the default)
Enrol eligible workers within 6 weeks of their start date
Provide written information to all workers about the scheme
Process any opt-outs within one month
Submit declaration of compliance within 5 months
Set a reminder for re-enrolment every 3 years

Section 01

Who must be auto-enrolled?

Not every worker must be automatically enrolled — the rules depend on age and earnings. Workers fall into three categories.

Eligible jobholders (must be auto-enrolled): aged 22–66, earning over £10,000 per year (£833/month or £192/week). You must enrol these workers automatically.
Non-eligible jobholders (can opt in): aged 16–21 or 67+, or earning between £6,240 and £10,000 per year. They are not auto-enrolled but can opt in, and if they do, you must contribute.
Entitled workers (can join): earning under £6,240 per year. They can join a pension scheme but you are not required to contribute.
Directors: a sole director with no other employees is exempt from auto-enrolment. A director who is also an employee (i.e. has a contract of employment) must be assessed like any other worker.

Section 02

Minimum contribution rates

The minimum contributions apply to 'qualifying earnings' — the portion of earnings between £6,240 and £50,270 per year for 2026/27. Contributions are split between employer and employee; check the Pensions Regulator's current thresholds before setting up payroll.

Employer minimum: 3% of qualifying earnings.
Employee minimum: 5% of qualifying earnings (including tax relief).
Total minimum: 8% of qualifying earnings.
Example: an employee earning £30,000 has qualifying earnings of £23,760 (£30,000 minus £6,240). The employer must contribute at least £712.80 per year (3% of £23,760).
You can choose to contribute more than the minimum — some employers use enhanced contributions as a benefit to attract staff.
You can also use a different definition of earnings (e.g. total earnings rather than qualifying earnings) as long as the total contribution meets the minimum.

Section 03

How to set up auto-enrolment

01
Find out your staging date or duties start date
If you are a new employer (registered with HMRC after April 2012), your duties start date is the date your first employee starts work. Use The Pensions Regulator's tools at thepensionsregulator.gov.uk to confirm your duties start date.
02
Assess your workforce
Identify which workers are eligible jobholders, non-eligible jobholders, and entitled workers. You must do this on your duties start date and then on an ongoing basis as workers' ages and earnings change.
03
Choose a pension scheme
You must choose a qualifying pension scheme. NEST (National Employment Savings Trust) is the government-backed default — it accepts all employers and has no minimum size requirement. Other popular providers include The People's Pension, Smart Pension, and Nest. Your payroll software may integrate with specific providers.
04
Enrol eligible workers
Enrol eligible workers in your chosen pension scheme within 6 weeks of their start date. Provide them with written information about the scheme, their contributions, and their right to opt out.
05
Process opt-outs
Workers can opt out within one month of being enrolled. If they opt out within this window, refund any contributions deducted. Keep records of opt-outs. You must re-enrol opted-out workers every 3 years.
06
Submit a declaration of compliance
You must submit a declaration of compliance to The Pensions Regulator within 5 months of your duties start date. This confirms that you have met your auto-enrolment duties. Failure to submit can result in fixed penalties of £400 and escalating daily fines.

Section 04

Ongoing duties

Re-enrol any workers who opted out every 3 years (re-enrolment date).
Assess new starters on their first day and enrol eligible workers within 6 weeks.
Monitor workers' ages and earnings — a worker who turns 22 or whose earnings rise above £10,000 must be assessed.
Pay contributions to the pension provider by the 22nd of the month following the payroll date.
Keep records of all auto-enrolment decisions, contributions, and communications for 6 years.
Submit a re-declaration of compliance to The Pensions Regulator every 3 years.

Section 05

Choosing a pension provider

The most important criteria for a small employer are: low charges, ease of setup, and integration with your payroll software. Here are the main options.

NEST: government-backed, accepts all employers, low charges (0.3% annual management charge + 1.8% contribution charge). Free to use. Integrates with most payroll software.
The People's Pension: popular with small employers, straightforward setup, 0.5% annual management charge. No contribution charge.
Smart Pension: fully digital, strong payroll integrations, competitive charges for small employers.
Nest is the safest default for most new employers — it cannot refuse you, and it has no minimum size requirement.

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Pension auto-enrolment for employers