What is automatic enrolment?

Automatic enrolment (auto enrolment) is part of the new pensions reform changes that the government has introduced to make it easier for people to save for their retirement. Under the reforms, all employers will have to automatically enrol workers who meet certain conditions, and who aren’t  already in a pension scheme that meets minimum requirements, into an auto enrolment pension scheme. They’ll also have to allow other workers to join such a scheme.

An auto enrolment scheme can be:

  • A defined contribution scheme with a minimum contribution level; or
  • A defined benefit or hybrid scheme providing a minimum benefit level.

In both cases, other conditions have to be met.

At the moment, many people aren’t taking up valuable pension benefits at work because they don’t join their employer's scheme. Auto enrolment is meant to overcome this and help people save for their retirement.

The value of an investment can fall as well as rise and is not guaranteed. You may get back less than the amount originally invested.