Pension auto-enrolment

How the duties work

Workers aged 22 to State Pension age earning above the £10,000 trigger must be enrolled automatically; others can opt in. Contributions are calculated on qualifying earnings between £6,240 and £50,270 (2026-27 band), with the 8% total minimum split at least 3% employer, the remainder employee (with tax relief). Workers can opt out within a month for a refund, and employers must re-enrol eligible leavers every three years and re-declare compliance to the Pensions Regulator.

What is not yet law

The Pensions (Extension of Automatic Enrolment) Act 2023 created powers to drop the age threshold to 18 and calculate contributions from the first pound of earnings, but those powers remain unexercised as at 2026-27: the age floor is still 22 and the £6,240 lower band still applies. Budget accordingly, but do not describe the extension as current law.

Three countries, three retirement systems

Australia compels the employer alone (12% superannuation guarantee, no opt-out); New Zealand runs opt-out KiwiSaver at 3.5% employer matching; the UK splits an 8% minimum between employer and employee on a banded earnings slice with an opt-out. Same policy goal, three different cost lines: for identical salaries, the employer retirement cost ranks Australia highest, UK middle-ish on the band arithmetic, New Zealand lowest, before any voluntary generosity.