As an employer, you must automatically enrol each eligible jobholder in a workplace pension. Eligible jobholders may choose to opt out of the scheme if they wish. However, you must not pressurise or provide incentives to encourage them to do so.

Even if you believe that all eligible jobholders will opt out of the scheme, you still need to put measures in place to fulfil your auto-enrolment obligations.

It is important to be aware that, if an eligible jobholder opts out of the scheme, they will be automatically re-enrolled every three years, and must then opt out again if they wish to do so.

For employees who have been automatically enrolled and have not opted out, you must contribute to their workplace pension in accordance with statutory employer contribution percentages. Employers must contribute a minimum of 1 per cent of “qualifying pay” for the first annual period, 2 per cent in the second period and then 3 per cent in each subsequent period.

It is important to be aware of these contribution obligations and to budget accordingly. Employees must contribute at least 1 per cent, 2 per cent and 4 per cent in the same periods, with tax relief added to these contributions.