What is pension re-enrolment in the UK and how does it work?

Pension re-enrolment is a legal requirement for UK employers and a cornerstone of the UK's retirement strategy. Since the introduction of automatic enrolment, private pension participation in the UK has surged from 47% to 89% (Department for Work and Pensions). Re-enrolment ensures that employees who previously opted out are regularly brought back into a system that is now the standard for retirement savings in the UK.

If an employee has opted out or stopped contributing, employers must re-enrol them and submit a re-declaration of compliance to The Pensions Regulator.

What is pension re-enrolment?

Pension re-enrolment is the process by which employers automatically re-enrol certain employees into their workplace pension scheme every three years. It applies to staff who previously left the company pension scheme or stopped contributing.

The goal with pension re-enrolment is to give employees another opportunity to save for retirement, while ensuring employers continue to meet their legal obligations.

This legal requirement is overseen by The Pensions Regulator and promotes long-term retirement savings while ensuring ongoing compliance.

Who needs to be re-enrolled?

Employees who have stopped contributions to their pension must be re-enrolled if they meet the specific eligibility criteria at the time of the re-enrolment date.

To qualify, an employee must:

• Be aged between 22 and State Pension age

• Earn above the Earnings Trigger (£10,000/year). It is important to note that while this £10,000 trigger determines eligibility, pension contributions are calculated based on Qualifying Earnings (the band between £6,240 and £50,270 for the 2026/27 tax year).

• Not currently be enrolled in a qualifying pension scheme

These criteria are reassessed at the time of re-enrolment, meaning eligibility can change over time.

Employers may assess staff who have never been automatically enrolled at the same time as those being re-enrolled. 

Postponement can be used for staff who become eligible for the very first time, for example if they have turned 22 or received a pay rise above the earnings trigger, but it cannot be used for the staff being re-enrolled.

What does pension re-enrolment mean for UK employers?

Pension re-enrolment places five core obligations on UK employers, from assessing eligible staff to submitting a re-declaration of compliance within the required deadline. As part of the process, employers must:

• Choose a re-enrolment date.

• Identify eligible staff, re-enrol them with effect from their re-enrolment date and start contributing to their pension scheme from this date.

• Write a re-enrolment letter to employees concerned within 6 weeks of their pension re-enrolment date, notifying them that they have been re-enrolled.

• Complete a new (re)-declaration of compliance within 5 calendar months of the third anniversary of your staging date.

• Ensure the contact details for the individual(s) overseeing the process are up to date, so that The Pensions Regulator can send them more information regarding future re-enrolment duties. 

Completing the Re-declaration of Compliance is a mandatory duty even if you have no eligible staff to re-enrol. Failure to submit this declaration within the 5-month deadline is one of the most common reasons for receiving an HMRC or TPR fine. This fine is typically a fixed fine of £400 with persistent non-compliance leading to escalating penalty notices ranging from £50 to £10,000 per day. 

Pension contributions under re-enrolment are applied to the employee's full net payroll calculation in the relevant pay period.

When should employers carry out re-enrolment?

Employers must carry out re-enrolment every three years, based on their original staging date or last re-enrolment date.

They can choose a re-enrolment date within a six-month window:

• Three months before the anniversary date.

• Up to three months after the third anniversary. 

Choosing the right date within this window allows employers to align re-enrolment with the start of a Pay Reference Period (PRP). This alignment is a significant administrative advantage, as it avoids the need for complex 'pro-rata' contribution calculations for staff re-joining mid-cycle.

How do employers carry out re-enrolment for the first time?

If you are carrying out the process for the first time, then the recommended pension re-enrolment date is the third anniversary of your staging date. In other words, the date when your automatic enrolment duties came into force for your business (i.e. the day your first member of staff started working for you).

The re-enrolment date should be the same for all staff that need to be re-enrolled.

How should re-enrolment be carried out if there is more than one payroll cycle?

The re-enrolment date should also be the same if there is more than one payroll cycle running within the business. If you have a monthly and weekly pay date for different employees, you must use the same re-enrolment date for both. 

If you run payroll for two companies under the same PAYE scheme, such as a director payroll and standard payroll, you’ll need to process re-enrolment at the same time for both. But if the companies are under two separate PAYE schemes, the re-enrolment date can be different.

Are there any exceptions to the re-enrolment rule?

Yes, certain exceptions apply. For instance, if an employee opted out or left the pension scheme within 12 months of your chosen re-enrolment date, you can choose whether or not to re-enrol them. Additionally, employees with HMRC tax protection (such as Lifetime Allowance protection) are typically exempt to avoid disrupting their tax status. 

Employees who are currently in their notice period are also not required to be re-enrolled in the pension scheme.

If an employee remains in the scheme but reduces their contributions below the minimum, re-enrolment will reset them to the required contribution level.

Certain company structures are also exempt. This includes a sole director with no other employees, or LLP directors without employment contracts. Once an employment contract is in place or additional staff are hired, re-enrolment duties apply.

💡 Good to know: Employees with enhanced or fixed HMRC Lifetime Allowance protection must be actively excluded from re-enrolment. Re-enrolling them could cause them to lose their protection and create a significant unexpected tax liability.

How does pension re-enrolment work in practice?

Pension re-enrolment works in practice by assessing employees, re-enrolling eligible staff and completing compliance reporting.

What are the key steps employers must follow?

• First, assess your workforce on your chosen re-enrolment date to identify eligible employees. This includes checking age, earnings, and current pension status.

• Next, automatically re-enrol qualifying employees into your pension scheme and restart contributions. Employees must then be informed in writing about their enrolment and their right to opt out again.

• Finally, complete the re-declaration of compliance within the required deadline to confirm that all duties have been met.

📌Example: An employee who opted out two years ago and now meets the earnings threshold must be re-enrolled during the next cycle.

What happens after the pension re-enrolment process has been completed?

Once the process has been completed, employees can choose to opt out again or continue contributing to the pension scheme.

After the first cycle, future re-enrolment dates are based on the third anniversary of the previous re-enrolment date.
Using payroll software can significantly simplify this process and reduce administrative burden by notifying you when it’s time to re-enrol, and making it easier to identify eligible employees.