Workplace Pensions Guide

A workplace pension (i.e. the pension you get through your work) is generally considered to be one of the best and most tax-efficient way to save for retirement, especially if your employer is paying into it.

Extra money for your retirement

When your employer pays into your pension it can make a big difference. That’s why the government introduced auto-enrolment – it basically means it’s all done automatically for almost everyone by law.

It works like this. If you’re auto-enrolled or opt-in to your workplace pension scheme, your employer will make regular contributions to your workplace pension – that’s extra money into your pension pot. You’ll have to pay in too, but the government will give you tax relief on these pension contributions – so you’re saving even more. How much this tax relief will be depends on your individual circumstances.

If you choose to join (i.e. you’re not automatically enrolled or don’t opt-in), your employer doesn’t have to make contributions, but they might choose to anyway. You can find out by checking how the scheme is set up with your employer.

See how it all adds up with a workplace pension

Workplace pensions explained in our infographic
graphic illustrating a simplified view of how workplace pensions work

Contribution levels

To help everyone get a pension they can live on, the government has set minimum pension contribution levels for auto-enrolment schemes. The minimum amount you can pay in applies to your employer and you.

However, your employer may decide to pay more into your scheme, so you should check with them. You can also choose to pay in more if you want.

It’s pretty simple really; the more you pay in and the earlier you start saving, the better your chance of building up a decent retirement pot.

You may have to pay personal contributions as well as receiving contributions from your employer. You’ll benefit from some tax relief from the government on any personal contributions you make. The amount of tax relief you’ll receive depends on your individual circumstances.


If you’re auto-enrolled into your workplace pension scheme by your company, but you don’t want to be, you can opt-out within a month of your auto-enrolment date.

Alternatively, if you're looking for a personal pension, please take a look at our Personal Pensions Guide.

And remember, there isn't a guarantee of investments making a return. Fund values can fall and rise and you may get back less than you invest.

This information is based on our understanding of current legislation, taxation law and practice, which may change.

We recommend that you speak to a financial advisor about your workplace pension.  

Personal Pensions

Read our personal pensions guide.