Free money from your employer (yes, really). How auto-enrolment, employer contributions, tax relief and the State Pension work, and why starting early matters.
A pension = long-term savings for later life, boosted by tax relief and (at work) employer contributions. Starting early gives compounding the most time.
Full new State Pension 2026/27: £241.30 a week. You usually need 35 qualifying years of National Insurance for the full amount, and at least 10 to get anything.
Qualifying years come from paying NI or getting NI credits. Gaps can sometimes be filled with voluntary contributions — check your record before paying.
Auto-enrolment: if you're 22+ (under State Pension age), work in the UK and earn over £10,000 a year with one employer, you're automatically put into a workplace pension.
Auto-enrolment minimum: 8% of qualifying earnings (earnings between £6,240 and £50,270). Employer pays at least 3%, you pay 5% (including tax relief). Some employers pay more.
Tax relief: at the 20% basic rate, every £80 you pay in becomes £100 in your pension. Higher-rate taxpayers can claim extra.
You can opt out — within a month you'll get a refund. But you lose employer money and tax relief. You'll be re-enrolled every three years if still eligible.
Every job can mean a new pot. Track them, update your address, and use the free Pension Tracing Service for lost ones. Combining pots can help — but check for fees or lost benefits first.
No auto-enrolment for the self-employed. Personal pensions still get tax relief. Building a habit (like a % of each payment) helps.
Pension cold calling is banned. Early access offers, 'free reviews' and unusual overseas investments are scam signs. Check the FCA register and get free guidance.
Most workplace pensions now are defined contribution: what you get depends on what goes in, growth and fees. The State Pension is your base layer.
A mid-life money check: get your State Pension forecast, trace old workplace pensions with the free Pension Tracing Service, and use MoneyHelper's free guidance.
Final review: State Pension basics, auto-enrolment, employer contributions, tax relief, opting out, lost pots and scams.
Free with a codePensions: quick answers
Why do people say 'start early' with pensions?
More years for contributions to grow through compounding. Yes. Money paid in at 22 has decades more growing time than money paid in at 45.
Pensions: in-depth guides
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