Pensions guide
Workplace pensions explained
Capital at risk. The value of investments can fall as well as rise, and you may get back less than you put in. Past performance is not a guide to future returns.
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If you work for an employer in the UK, there’s a good chance you’re already paying into a workplace pension. Here’s how auto-enrolment works, what you and your employer pay, and what to think about before changing anything.
Capital at risk. The value of investments can fall as well as rise, and you may get back less than you put in.
Good to know: This is general information, not personal advice. Pensions are long-term investments.
The value can go down as well as up, so you could get back less than has been paid in. Capital at risk.
For free, impartial guidance, use MoneyHelper. If you’re 50 or over with a defined contribution pension, you can book a free Pension Wise appointment.
What is a workplace pension?
A workplace pension is a pension set up by your employer. Money is taken from your pay, your employer adds a contribution, and the government adds tax relief. The pot is usually invested, so it can grow over time — but its value can also fall.
Most workplace pensions today are defined contribution schemes, where what you get depends on how much is paid in and how the investments perform. Some employers, particularly in the public sector, offer defined benefit schemes (final salary or career average), which pay an income based on your salary and years in the scheme.
Who gets automatically enrolled?
All employers must provide a workplace pension scheme. Your employer must automatically enrol you and pay in if all of these apply:
- you’re classed as a “worker”
- you’re aged between 22 and State Pension age
- you earn at least £10,000 a year
- you usually work in the UK
If you don’t meet these conditions, you can usually still ask to join, and your employer can’t refuse. Whether they must contribute depends on what you earn. They don’t have to pay in if you earn £520 a month (£120 a week or £480 over four weeks) or less.
Your employer must write to you when you’re enrolled, telling you the scheme type, who runs it, what each side pays and how to leave if you want to.
How much goes in?
Under auto-enrolment, the legal minimum total contribution is 8% of your qualifying earnings, with at least 3% from your employer and the rest from you, including tax relief. In most schemes, contributions are based on earnings between £6,240 and £50,270 a year before tax.
Qualifying earnings include salary or wages, bonuses, commission, overtime and statutory payments such as sick pay and maternity pay. Some employers pay more than the minimum, and some schemes calculate contributions on your whole salary instead.
GOV.UK gives a simple example for a defined contribution scheme: each payday you put in £40, your employer puts in £30 and you get £10 tax relief, so £80 goes into your pension.
| Who pays | Minimum |
|---|---|
| Employer | 3% of qualifying earnings |
| You (including tax relief) | 5% of qualifying earnings |
| Total | 8% of qualifying earnings |
To see what different contribution levels could add up to over time, try our pension calculator.
Tax relief and salary sacrifice
Workplace pensions get tax relief in one of two ways. With net pay, your contribution is taken before Income Tax is worked out. With relief at source, your contribution comes out after tax, and the pension provider claims basic-rate relief from the government and adds it to your pot.
Our pension tax relief guide explains the difference.
Some employers offer salary sacrifice, where you give up part of your salary and your employer pays it straight into your pension. In some cases this means you and your employer pay less tax and National Insurance. It also lowers your salary on paper, which can affect things like mortgage applications, so ask your employer how their scheme works.
Can you opt out?
Yes, you can choose to leave a workplace pension, and your employer can’t encourage or force you to opt out. Opting out means more take-home pay now, but you’d usually lose your employer’s contribution and the tax relief too. If you opt out, you’ll normally be re-enrolled from time to time, as long as you still meet the conditions.
Before opting out, it’s worth thinking about what you’d be giving up. An employer contribution is money you wouldn’t otherwise get. If money is tight, free guidance from MoneyHelper can help you weigh things up.
What happens when you change jobs?
Your pension stays yours when you leave. Contributions stop, but the pot usually stays invested with the old provider. Your new employer will enrol you into their scheme, so over a career many people end up with several pots.
Some people combine old pots to keep things simpler. Before transferring, check for exit fees, valuable guarantees or benefits you could lose, and the charges on the new scheme. Defined benefit schemes have their own transfer rules and valuable guarantees, so check with the scheme and MoneyHelper before doing anything.
If you’ve lost track of an old pension, the government’s Pension Tracing Service can help you find the scheme’s contact details.
Things to check
- How much you and your employer pay, and whether your employer will match higher contributions.
- Whether your scheme uses net pay or relief at source.
- Where your money is invested and the yearly charges — your annual statement shows these.
- Your State Pension forecast, so you can see the bigger picture — see our State Pension guide.
FAQ
Do I have to be in a workplace pension?
No. You can opt out, but you’d usually lose your employer’s contribution and the tax relief. If you meet the conditions, you’ll normally be re-enrolled from time to time.
What is the minimum my employer has to pay?
Under auto-enrolment, at least 3% of your qualifying earnings, as part of a minimum total of 8%. Some employers pay more.
I earn under £10,000 — can I join?
Yes, you can usually ask to join. Your employer has to contribute if you earn more than £520 a month.
What happens to my pension if I leave my job?
It stays yours and usually stays invested. You can leave it where it is or look at transferring it, after checking fees and any benefits you could lose.
Is a workplace pension safe?
The investments can fall in value. Workplace pension schemes are regulated, and your scheme’s information explains how your money is held and protected.
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Sources
Figures checked on 3 October 2026. Rules and rates change, so check the latest on GOV.UK.