A workplace pension is a way of saving for your retirement that's arranged by your employer. Some workplace pensions are called 'occupational', 'works', 'company' or 'work-based' pensions.
How they work
A percentage of your pay is put into the pension scheme automatically every payday. In most cases, your employer also adds money into the pension scheme for you. You may also get tax relief (https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief) from the government.
Joining a Workplace Pension
Since 2018 all employers must provide a workplace pension scheme.
Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all of the following apply:
Use the staging date calculator (http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx) to check when you could be enrolled. (Your employer can delay the date they enrol you in certain circumstances.) The calculator is for employers but also works for employees.
When your employer doesn't have to automatically enrol you
Your employer usually doesn’t have to automatically enrol you if you don't meet the previous criteria or if any of the following apply:
- you've already given notice to your employer you're leaving your job, or they've given you notice
- you have evidence of your lifetime allowance protection (https://www.gov.uk/tax-on-your-private-pension/lifetime-allowance) (for example, a certificate from HMRC)
- you've already taken a pension arranged through your employer
- you get a one-off payment from a workplace pension scheme that's closed (a 'winding up lump sum'), and then leave and rejoin the same job within 12 months of getting the payment
- more than 12 months before your staging date, you left ('opted out') of a pension arranged through your employer
- you're from another EU member state and are in a EU cross-border pension scheme (http://www.thepensionsregulator.gov.uk/guidance-cross-border-schemes.aspx)
- you're in a limited liability partnership
- you're a director (https://www.gov.uk/employment-status/director) without an employment contract and employ at least one other person in your company.
You can usually still join their pension if you want to. Your employer can't refuse.
If your income is low
Your employer doesn't have to contribute to your pension if you earn less than:
- £490 per month
- £113 per week
- £452 per 4 weeks
What happens when you're automatically enrolled
Your employer must write to you when you've been automatically enrolled into their workplace pension scheme. They must tell you:
- the date they added you to the pension scheme
- the type of pension scheme and who runs it
- how much they'll contribute and how much you'll have to pay in
- how to leave the scheme, if you want to
- how tax relief applies to you
Delaying your enrolment date
Your employer can delay the date that they must enrol you into a pension scheme by up to 3 months.
In some cases they may be able to delay longer if they've chosen either:
- a 'defined benefit' pension
- a 'hybrid' pension (a mixture of a defined benefit and defined contribution pensions that allows you to take a defined benefit pension
Your employer must:
- tell you about the delay in writing
- let you join in the meantime if you ask to
What your employer can't do
Your employer can't:
- unfairly dismiss or discriminate against you for being in a workplace pension scheme
- encourage or force you to opt out
Further advice and information about pension schemes is available from the Pensions Regulator. Their website is www.thepensionsregulator.gov.uk/
