How to Set Up Auto-Enrolment Pension for Your First Employee
A step-by-step guide to workplace pension auto-enrolment for UK small employers — staging dates, eligible workers, contributions and providers.
Is auto-enrolment mandatory for you?
Yes, if you have at least one member of staff. The Pensions Regulator writes to new employers when they take on their first employee.
Assess your workers
3 categories: eligible jobholders (22+ and earning >£10,000/year — must be enrolled); non-eligible (under 22 or earning £6,240-£10,000 — can join if they ask); entitled (earning <£6,240 — can join but no employer contribution required).
Choose a pension provider
NEST (the government scheme) accepts all employers. NEST charges 0.3% annual management charge and 1.8% contribution charge. Alternatives: The People's Pension, Smart Pension, Aviva, Royal London.
Set up contributions
Minimum total contribution 8% of qualifying earnings (£6,240-£50,270): at least 3% employer, 5% employee (or 4% employee + 1% tax relief).
Declaration of compliance
Submit to The Pensions Regulator within 5 months of staging date. Failure: fixed penalty £400, then escalating £50-10,000/day.