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Workplace Pension – Auto Enrolment

Introduction

Starting from October 2012, employers and employees in the UK have come together to save for retirement through a new pension saving plan called auto-enrolment. This plan allows you to save for your retirement, with even the taxman providing assistance through tax relief.

After completing your third month of employment, you will be automatically enrolled in our workplace pension scheme. The following information provides an overview of how the scheme operates and the choices available for saving towards retirement.

Since the introduction of auto-enrolment in 2012, all eligible employees are to be enrolled in SmartWork’s selected auto-enrolment scheme, The People’s Pension. It is important to note that all employees have the option to opt out of the scheme after the initial enrollment or opt-in if they are not considered eligible jobholders. Please know the scheme will be activated after your first three months of employment.

How Contributions are Calculated

All contributions to the plan are based on a percentage of your qualifying earnings. Qualifying earnings is a band of earnings we use to calculate contributions and is used by most employers.

The figures are reviewed annually by the government. For the 2025/26 tax year, the range is £6,240 to £50,270 per year. We contribute a percentage of our workers’ gross annual earnings that fall between these figures. The first £6,240 isn’t included, so qualifying earnings can’t be more than £44,030 (£50,270 minus £6,240). For example, if a worker earns £20,000, their qualifying earnings would be £13,760.

According to current legislation, we set employer contributions at 3% and employee contributions at 5% of your qualifying earnings.

The Benefits of Auto-Enrolment

The great advantage of this plan is that your pension contributions will be deducted from your earnings before any tax is applied. This means that every £5 of contributions deducted from your pay will only cost you £4, with the remaining £1 being provided as Tax Relief from the Government.

Eligibility

You can join the auto-enrolment pension scheme if you meet the following criteria:

  • SmartWork employs you for at least 12 weeks.
  • You are not already a member of a qualifying pension scheme.
  • You are aged 22 or over but below State Pension Age.
  • Your earnings before tax are at least £10,000 per year (or £833 per month, or £192 per week)
  • You are paid through PAYE weekly, two-weekly, four-weekly, or monthly.
  • You work in the UK.

Managing your Pension

You may be wondering who will be responsible for managing your pension. Our selected pension provider is The People’s Pension.

They will contact you shortly after you receive your first payslip with your pension deduction to provide further information and details about your online account. In the meantime, please ensure that the details we have on file for you are accurate by contacting the SmartWork payroll team by emailing payroll@smartwork.com.