Automatic Enrolment (Workplace Pension Legislation)

New to being an employer? 

Do you have at least one employee earning £10,000 per annum or more and aged 22+? 

As an employer, under UK law, you must offer a workplace pension and if applicable, enrol your eligible workers into a qualifying scheme within prescribed timescales.

We assist employers of all sizes, from just one employee up to those with many thousands, in meeting their AE obligations. 

An existing employer with a clunky, out-dated contribution process? 

Looking to sell your business and you've been asked for a pension warranty by the prospective purchaser? 

Received a 'love letter' from the Pensions Regulator demanding that you adhere to a given rule or obligation that you hadn't realised applied to you? 

Our team of experts have been dealing with Automatic Enrolment since its introduction in 2012 and have helped countless employers to successfully fulfil their employer obligations. We can liaise directly with your pension provider and similarly report directly back to the Pensions Regulator on your behalf. 

We work with employers, solicitors, accountants and other financial advisers to resolve issues for business of all shapes and sizes.   

Following the increase from April 2025 in Employer National Insurance Contributions (NIC's), it has become even more appealing to introduce Salary Exchange to your workforce for the purposes of contributing towards their pensions. 

In brief, salary exchange (otherwise known as salary sacrifice) is an agreement between you and your employees, whereby they, the employee, agrees to 'exchange' an amount of salary in return for an increased employer pension contribution.

It works in the same way as other salary related benefit schemes, for example company car, cycle to work and childcare vouchers schemes.

How does this differ to what you offer already? Many, if not most, modern contracts have been established on a 'relief at source' basis, that is, for most individuals, including employed members of a workplace pension, any contribution paid by the member themselves attracts tax relief. Typically, this means that contributions are taken from an employee’s net salary and then remitted to the pension provider, who in turn claims tax relief on the members behalf at the basic rate of income tax (currently 20%). 

Salary exchange removes the need for a pension provider to claim this tax relief on the pension members behalf. This is because the sponsoring employer (you!) instead agrees to make an increased ‘employer only’ pension contribution, in return for the employee receiving less salary. 

This reduction in salary and subsequent increase in employer pension contribution means a reduction in the individuals gross (pre-tax) salary. That is, the amount ‘exchanged’ is not ever classed as being the individual’s earned income and therefore, is not subject to income tax or NIC's.

As the above suggests, salary exchange means that not only do employees receive tax relief on the amount sacrificed at their highest marginal rate (which may well be more than 20%), but you and they pay less National Insurance.

The total amount received by the employees pension each month can remain the same, meaning their take home pay will therefore be increased by the savings made or equally, the pension can be increased and take-home pay remain unchanged. 

The employer saving, now 15% on the amount sacrificed can be retained by the employer, or be passed on in part or in full.