Workplace pensions explained (2026/27)

What is a workplace pension?

A workplace pension is a pension your employer sets up for you. Each payday, a percentage of your pay goes into it, along with a contribution from your employer and tax relief from the government. The money is invested so it can grow until you're able to take it. That's usually from age 55, rising to 57 from 6 April 2028.

Automatic enrolment

By law, your employer must automatically enrol you in a workplace pension if you:

are aged between 22 and State Pension age
earn more than £10,000 a year
usually work in the UK.

If you earn between £6,240 and £10,000 a year, you can ask to join, and your employer must still pay in. If you earn less than £6,240, you can ask to join, but your employer doesn't have to contribute.

How much goes in

The legal minimum is 8% of your qualifying earnings. At least 3% must come from your employer, and you make up the rest, including tax relief.

In 2026/27, qualifying earnings are the part of your yearly pay between £6,240 and £50,270. For example, on a salary of £30,000:

your qualifying earnings are £23,760
your employer pays at least £712.80 a year (3%)
you pay £1,188 a year (5%), including tax relief
the total is £1,900.80 a year, or about £158 a month.

Paid from your take-home pay£950.40
Tax relief from the government£237.60
Your employer's contribution£712.80

Total going into your pension: £1,900.80 a year

Minimum yearly contributions on a £30,000 salary in a scheme where tax relief is added to your pension, 2026/27. Your scheme may work differently.

Many employers pay more than the minimum, and some will match extra contributions up to a limit. If you pay in a little more, they pay in more too. Check your contract or ask your HR team, because this is the free money that step 3 of the route is all about.

How tax relief works

Pension contributions get tax relief, so saving costs you less than it seems. In many workplace schemes, you pay in from your take-home pay and your pension provider claims basic-rate tax relief from the government. For example, if you pay in £80, the government adds £20, so £100 goes into your pension.

In other schemes, your contributions are taken from your pay before tax, so you get the relief automatically. Higher-rate taxpayers can claim extra relief through a Self Assessment tax return.

Thinking of opting out?

You can opt out within a month of being enrolled and get your contributions back. But you'd also give up your employer's contributions and the tax relief, which are effectively part of your pay. Your employer must re-enrol you about every three years, so you'd face the same choice again.

Where your money is invested

Unless you choose otherwise, your money goes into your scheme's default fund. You can usually log in to see where it's invested, check the fees and choose different funds if you'd prefer. Because you may not touch this money for decades, it has plenty of time to grow.

Keep track of your pensions

Each new job can mean a new pension. Keep a simple list of your pension providers and update your address with them when you move. If you lose track of an old pension, the government's free Pension Tracing Service can help you find it.

Common questions

When can I take money from my pension?

Usually from age 55. This is due to rise to 57 from 6 April 2028. Your scheme's rules may set a different age.

What happens to my pension when I change jobs?

It stays invested where it is, and your new employer will usually enrol you in a new scheme. You may be able to combine your pensions, but check the fees and any benefits you might lose first.

Should I pay in more than the minimum?

That depends on your circumstances. If your employer matches extra contributions, paying enough to get the full match is usually worth considering, because your employer's extra money costs you nothing. MoneyHelper offers free, impartial pensions guidance if you'd like to talk it through.

Sources

We checked this guide against these sources on 8 October 2026. Rules and allowances can change, so always check the latest position on GOV.UK.

This guide is general information, not personal financial advice. Read our full disclaimer.