Automatic Enrolment, often referred to as auto-enrolment, or AE for short, was introduced into the UK workplace in 2012, off the back of the new Pensions Act of 2008. The basic idea is that most people in the UK weren’t saving enough for their retirement, and no amount of encouraging them was going to fix that, so the Government decided a little ‘nudge’ was in order. The legislation was designed to get UK businesses take some responsibility, by requiring them to set up a workplace pension, to put their staff into it and contribute at least a minimum amount to that pension on their staff’s behalf (along with a minimum staff contribution). The introduction was phased from October 2012, and by February 2018, all employers were covered by the regulations.

UK auto-enrolment has generally been seen as one of the most successful UK social policy interventions in recent decades, with more than 1.8 million employers operating workplace schemes and nearly 90% of eligible employees enrolled in them (over 10 million people). The regulations provided a way for employees to remove themselves from the scheme and policymakers expected around 30% of employees would do so, but in practice rates have been nearer 9-10%.

This post covers the key features of the UK as they pertain to payroll software. Future posts will cover the implementation and testing of AE software solutions.

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The Basics

UK AE is designed to capture the majority of the UK workforce, excluding very young and very old (no judgement intended!) workers, and those on low pay. When a business employs their first member of staff, they immediately have duties under the legislation; the start of their first employee’s pay period is known as their Duties Start Date.

Ignoring any option to postpone their duties (known as Postponement, covered later), as part of the first payroll run, the employer must assess each of their employees against a set of criteria which decide if they should be put into a workplace scheme. These criteria are based on age and earnings and are set out table below, but to understand the process properly, we must introduce a few formal terms. These terms are defined at a high level here; more precise definitions are included later:

• Entitled worker – this is used to refer to employees whose pay is far too low to include them in AE
• Non-eligible jobholder – this is used to refer to employees that are either too young, or too old, or do not earn enough to automatically enrol them in the pension scheme
• Eligible jobholder – this is used to refer to employees whose age and earnings mean they should be automatically enrolled in the scheme

These terms are important as they are used throughout the documentation on the subject, and for our purposes, they provide a common, precise language when talking about the assessment and subsequent ‘state’ of employees under AE. This is how those categories are applied based on age and earnings (2025 figures):

Earnings	16–21	22–SPA	SPA–74
< £6,240/year	Entitled worker	Entitled worker	Entitled worker
£6,240–£9,999/year	Non-eligible jobholder	Non-eligible jobholder	Non-eligible jobholder
≥ £10,000/year	Non-eligible jobholder	Eligible jobholder	Non-eligible jobholder

Enrolment

Continuous Assessment