Workplace pension basics: what to check in your first year in a job

Under auto-enrolment, your employer must enrol you in a qualifying pension scheme if you are aged between 22 and State Pension age, earn at least £10,000 a year and usually work in the UK. You do not need to apply: you should get a letter or email from your employer or the pension provider explaining the scheme and the date you were enrolled.

If you earn less than £10,000 or are aged 16 to 21, you can usually ask to join. Your employer must then contribute too if you earn more than £520 a month (£120 a week).

Contributions are normally worked out on "qualifying earnings": the slice of your pay between £6,240 and £50,270 a year before tax. Some employers are more generous and use your full salary, so check your scheme booklet.

Here is what the legal minimums look like on qualifying earnings for three salaries. Your 5% is shown before tax relief, so the amount that actually leaves your take-home pay is lower.

On a £30,000 salary, qualifying earnings are £23,760 (£30,000 minus £6,240). Your 5% is £1,188 a year, or £99 a month. In a relief at source scheme, £19.80 of that monthly amount comes from basic-rate tax relief, so £79.20 actually leaves your pay. Put your own salary into our pension calculator to see how that grows over a career, and the take-home pay calculator to see the effect on your monthly pay.

Find the pension line on your first payslip and check it matches what your scheme says. The figure you see depends on which of three methods your scheme uses.

Relief at source: your contribution is taken after tax and the provider claims 20% basic-rate relief from HMRC and adds it to your pot. Your payslip shows 80% of your gross contribution. Higher and additional-rate taxpayers can claim the extra relief through Self Assessment or by contacting HMRC. Non-taxpayers still get the 20%.

Net pay: your contribution is taken before tax, so you get relief at your highest rate automatically. If you earn less than the Personal Allowance (£12,570) you pay no tax and would get no relief this way. For contributions from the 2024/25 tax year onwards, HMRC makes top-up payments to eligible low earners in net pay schemes; if you get a letter about it, respond to it.

Salary sacrifice: you agree to a lower salary and your employer pays the difference into your pension. You save income tax and National Insurance, and some employers add their NI saving to your pot. Our guide to pension tax relief covers each method in more detail.

The 3% employer minimum is a floor, not a standard. Many employers match higher contributions: for example, if you pay 6% they pay 6%. Matching is the cheapest pension money you will ever get, because every extra pound you put in brings an extra pound from your employer plus tax relief.

Look for the matching rules in your staff handbook or benefits portal, or ask HR or payroll directly. Useful questions:

Unless you choose otherwise, your money goes into the scheme's default fund. Default funds in auto-enrolment schemes have a charge cap of 0.75% a year, and many charge less. Log in to your provider's website or app, which is usually where you find the fund name, the annual charge and your current value.

Younger savers with decades to go often stay in the default, which is designed for people who do not want to choose. If you want to look at alternatives such as a higher-equity or ethical fund, our guide to workplace pension investment choices explains the trade-offs.

While you are logged in, fill in the nomination or "expression of wish" form. It tells the scheme who you would like to receive your pension if you die. It takes five minutes and is one of the most commonly skipped steps.

You can opt out, but you give up your employer's contribution and the tax relief, which is effectively a pay cut. If you opt out within a month of being enrolled you get back what you have already paid. After that, your contributions usually stay in the pension until you can access it.

Your employer must re-enrol you every three years if you still qualify, and you would need to opt out again. If money is genuinely tight, a smaller step can be better than leaving: some schemes let you pause, and you can rebuild a cash buffer alongside the minimum contribution. A short emergency fund held in easy access savings means a car repair does not tempt you to stop your pension.

Each employer usually sets up a new pot, so a few job changes can leave you with several. Keep a note of each provider and your member number. If you have lost track of an old pension, the government's Pension Tracing Service can find contact details for the scheme. Before combining pots, check for exit fees and valuable features such as guaranteed annuity rates, and never transfer out of a defined benefit (final salary) scheme without regulated advice.

You can normally take money from a workplace pension from age 55, rising to 57 from 6 April 2028. Usually up to 25% can be taken tax-free and the rest is taxed as income. Because the money is locked away until then, it works best alongside shorter-term savings. If you are weighing up where an extra £50 a month should go, our comparison of ISAs and pensions for retirement sets out the trade-offs.

A habit app such as SYM can help with the shorter-term side: it suggests a small amount to put aside each day, so your emergency fund grows while your pension does its job in the background.