Sep 14

2026

Auto-enrolment for growing employers: the pension duties that are easy to get wrong

Auto-enrolment duties for growing employers do not start when headcount reaches a particular number. They begin when the first member of staff starts work and continue through payroll monitoring, contributions, re-enrolment and compliance reporting. Growing employers can therefore create problems later even if the original pension setup was correct.

The thresholds that catch people out

For 2026/27, the automatic-enrolment earnings trigger remains £10,000 a year. The lower and upper qualifying-earnings levels remain £6,240 and £50,270. Minimum qualifying-earnings contributions remain 8% in total, including at least 3% from the employer.

The thresholds must also be applied to the relevant pay reference period. An employee whose annualised pay rises above the trigger may therefore become eligible during the year. Employers should monitor age and earnings, including new starters, each payroll cycle. If someone should have been automatically enrolled but was missed, The Pensions Regulator normally expects contributions to be backdated to the date they first met the eligibility criteria.

This is the kind of payroll control our SME business advisory team reviews when growing employers add staff or change pay structures.

The duties that are easy to overlook

Postponement can delay automatic-enrolment assessment for up to three months, but it must be used correctly. The employer must issue the prescribed notice no later than six weeks and one day after the relevant postponement date. At the deferral date, the worker must be assessed again.

Employees who are automatically enrolled have a one-month opt-out period, starting from the later of active membership being created or receipt of the enrolment information. A valid opt-out during that window normally results in a refund. Leaving later is instead treated under the pension scheme’s rules for ceasing membership.

Every three years, employers must also deal with cyclical re-enrolment. The chosen re-enrolment date must generally fall within three months before or after the third anniversary of the duties start date. Not everyone who previously opted out must automatically be put back in; the detailed rules depend on when they left and whether they meet the eligibility conditions at the re-enrolment date. A re-declaration of compliance is required within five months of the third anniversary.

These checks belong in the regular payroll and month-end process, not in an annual review. A seven day month-end close should therefore include pension contributions, employee status and payroll reconciliation where relevant.

The Pensions Regulator can issue a £400 fixed penalty for certain failures and escalating daily penalties where non-compliance continues. The daily amount varies according to employer size, from £50 for the smallest employers to £10,000 for the largest.

The position in the Republic of Ireland

My Future Fund launched on 1 January 2026. Employees aged 23 to 60, earning at least €20,000 a year across employments and without qualifying supplementary pension coverage recorded through payroll are generally automatically enrolled. In 2026–28, employee and employer contributions are each 1.5% of gross pay, with a 0.5% State contribution. These rise in stages to 6%, 6% and 2% respectively from 2035.

Unlike the UK system, the State top-up substitutes for income-tax relief on employee contributions. Groups employing staff on both sides of the border therefore need separate processes. Our cross-border accounting and tax specialists can help coordinate the schemes alongside wider cross-border payroll obligations.

What to check now

If your workforce, pay structure or pension arrangements have changed, review the setup before the next payroll run. Guidance on employer duties is available directly from The Pensions Regulator.

If you are unsure whether every eligible employee is being assessed and enrolled correctly, talk to SCC Chartered Accountants. A short review now can prevent backdated contribution corrections and regulatory action later.