UK Auto-Enrolment Pension Worker Guide 2026/27
UK auto-enrolment 2026/27: the £10,000 earnings trigger, 8% minimum (3% employer), qualifying earnings £6,240 to £50,270, opting out, salary sacrifice.
How workplace pension auto-enrolment works for workers in 2026/27: who is enrolled, minimum contributions on qualifying earnings, opting out, and salary sacrifice. Contribution rules are UK-wide; the salary sacrifice figures use England, Wales and Northern Ireland tax bands.
How auto-enrolment works
- You start a job, or your circumstances change
- Your employer assesses you: aged 22 to State Pension age, earning at least £10,000, usually working in the UK
- If you qualify you are enrolled (your employer can postpone this for up to 3 months)
- You and your employer pay at least 8% of qualifying earnings between you, with at least 3% from the employer
- You can opt out within a month for a refund, or stay in
- Your employer re-enrols eligible staff who left about every 3 years
Worked example: £45,000 salary, relief at source
- Qualifying earnings: £45,000 - £6,240 = £38,760
- Your contribution (5%): £1,938 a year, of which you pay £1,550 from net pay and £388 is basic-rate tax relief
- Employer contribution (3% minimum): £1,163 a year
- Total into the pension: £3,101 a year
- Cost to you: £1,550, so every £1 you pay puts £2.00 in the pension
In a net pay arrangement the £1,938 is taken from pay before Income Tax instead, with the same tax effect for a basic-rate taxpayer. A higher-rate taxpayer in a relief-at-source scheme can claim the extra relief through Self Assessment or by contacting HMRC.
Salary sacrifice
If your employer offers it:
- You give up the contribution from gross pay and your employer pays it in
- You save Income Tax and employee NI on the amount (28% for a basic-rate taxpayer, 42% above the Upper Earnings Limit)
- Some employers add their own 15% employer NI saving to your pension
What opting out gives up
- Your employer's contributions (£1,163 a year in the example above)
- Tax relief on your own contributions (£388 a year in the example)
- Tax-free investment growth inside the pension
Reasons people do opt out include genuinely being unable to afford contributions or very short employment; weigh what you would lose first.
Related pages
Frequently asked questions
What is UK pension auto-enrolment?
Your employer must enrol you in a workplace pension and pay into it if you are classed as a worker, aged between 22 and State Pension age, earn at least £10,000 a year and usually work in the UK. You, your employer and tax relief all add to the pot. Some people are excluded, for example a director without an employment contract who employs at least one other person in the company, and anyone who has given or been given notice.
What are minimum auto-enrolment contributions?
The legal minimum is 8% of qualifying earnings: at least 3% from your employer and the rest (5%) from you, including tax relief. In a relief-at-source scheme you pay 4% from net pay and 1% is added as basic-rate relief. Qualifying earnings for 2026/27 are those between £6,240 and £50,270 a year. Many employers pay more, or use total pay. Self-employed people are not auto-enrolled.
Can I opt out of auto-enrolment?
Yes. If you opt out within a month of your employer adding you to the scheme, you get back what you have paid in. After that you can stop contributing, but payments usually stay in the pension until you can take it, normally from 55, rising to 57 from 6 April 2028. Your employer must re-enrol you about every 3 years if you still qualify, and you can opt out again.
Should I opt out of auto-enrolment?
Usually not. With minimum contributions in a relief-at-source scheme, every £4 you pay from net pay becomes £8 in the pension: £1 of tax relief and £3 from your employer. That is gov.uk's own example. Opting out gives up the employer contribution. If you cannot afford contributions, check what you would lose before deciding.
How does salary sacrifice into auto-enrolment work?
With salary sacrifice you give up salary and your employer pays the same amount into the pension, so you save Income Tax and employee NI on it. Employee-side cost of £1 into the pension: about £0.72 for a basic-rate taxpayer, £0.58 for a higher-rate taxpayer above the Upper Earnings Limit, and £0.38 inside the £100,000 Personal Allowance taper (England, Wales and Northern Ireland bands). Some employers also add their NI saving. Not every employer offers it, and it cannot take pay below the minimum wage.
What does qualifying earnings mean?
The band of earnings that minimum contributions are worked out on: £6,240 to £50,270 for 2026/27. It includes salary, bonuses, commission, overtime and statutory sick, maternity, paternity, adoption and shared parental pay. On a £40,000 salary the 5% employee minimum is 5% of £33,760 = £1,688 a year. Some schemes use all earnings instead, which is more generous.
What pension provider does auto-enrolment use?
Your employer chooses the scheme. NEST (set up by the government) is one option, and many employers use a master trust or an insurer. The provider invests contributions in a default fund unless you choose another, and you can usually see your pot and change funds through the provider's website.
Can I transfer auto-enrolment pensions when changing jobs?
Usually yes. Your old pot stays yours when you leave; you can leave it, or transfer it to your new employer's scheme or a personal pension if that scheme accepts transfers. Compare charges and investment options, and check you will not lose any guarantees or protected benefits, before moving it.
What happens to my pension if I lose my job?
The pension stays in your name. Your employer's contributions stop, but the pot stays invested. You can leave it with the provider, transfer it, or combine it with a new employer's scheme. You normally cannot take money out until 55, rising to 57 from 6 April 2028. Keep your contact details up to date with each provider.