When Should I Start Contributing to a Pension?

12th August 2025

You will be automatically enrolled into your employer's pension scheme if you are 22 years old and earn more than £10,000 per year.

Your employer must contribute a minimum of 3% of qualifying earnings to your pension.

Your employer must contribute a minimum of 3% of qualifying earnings to your pension.
What is a pension?

A pension is the most popular way to save up money to support yourself once you retire.

There are different types of pensions. One of the most common is a workplace pension, where you and your employer contribute into a pension pot. You can also have a personal or private pension that you set up for yourself.

When can I start paying into a pension?

The age you can start contributing into your pension depends on who is setting up your pension, and the type of pension you want to pay into.

Once you're 16 years of age, you can opt into your employer's workplace pension scheme.

You can begin paying into your own personal pension once you turn 18.

If you are aged 22 and have a job that pays more than £10,000 per year, your employer will automatically enrol you onto their pension scheme.
They will also start contributing to your pension.
If you earn £6,240 or more per year, you can ask your employer to enrol you in their pension scheme.
Does my employer contribute to my pension?

Yes, your employer can contribute to your pension every month depending on how much you earn.

The amount you and your employer pay towards your pension depends on:

What type of workplace pension scheme you're in.
Whether you’ve been automatically enrolled into a workplace pension or whether you’ve opted to join one voluntarily.

If you’ve been automatically enrolled, you and your employer must pay a minimum percentage of your earnings into your workplace pension scheme. In most automatic enrolment schemes, you will contribute depending on your total earnings. Your total earnings include:

Salary or wages
Overtime
Statutory sick pay
Bonuses and commission

Statutory maternity, paternity, or adoption pay
For the 2025/26 tax year in the UK, your employer must contribute a minimum of 3% of qualifying earnings, although they can choose to contribute more.

If you’ve voluntarily enrolled into a workplace pension, and you earn over a certain amount, the employer is required to contribute the minimum amount.

For the 2025/26 tax year in the UK, your employer must contribute a minimum of 3% of qualifying earnings, although they can choose to contribute more.

The minimum your employer pays 3%
You pay 5%
Total minimum contribution 8%

This is the case if you earn more than:
£520 a month
£120 a week
£480 over 4 weeks
Why should I start paying into a pension?

Pensions hold many benefits that you may not receive with another savings product. For example:

Your employer may contribute to your pension, which can help your pension grow.
If you’re a basic rate taxpayer, for every £100 you put into your pension, the government contributes £25 in the form of generous tax relief.
If you’re a higher or additional rate taxpayer and your pension does not provide the tax-relief automatically, you can claim the further tax-relief by completing a self-assessment tax return. This also has the potential benefit of recovering your eligibility for child benefit, personal savings allowance, and/or personal allowance, depending on your gross income and the amount you pay into your pension.
Pensions are treated favourably for inheritance tax purposes, therefore if you die before you reach age 75, your pension will be passed on without tax deductions. (Please Note: This is currently being reviewed, meaning it may be part of estate from 06/04/2027).
When you reach retirement, you can take up to 25% of your money as a tax-free lump sum.
Good pension funds are diversified, which means the money is invested in a carefully selected mixture of assets to help manage risk.
How much should I be saving into my pension?

You need to save enough into your pension to provide yourself with a comfortable income during retirement. It’s ideal to contribute a portion of your earnings into your pension pot every month if it’s possible for you to do so.

How can we help?

It’s important to understand all options regarding your pension. At Almond Financial, we offer friendly and efficient advice to help your investments thrive.

You can book a no-cost no-commitment meeting with one of our Financial Advisors today.
https://www.almondfinancial.co.uk/do-you-need-a-financial-advisor-for-your-pension/