Workplace Pension Auto-Enrolment: What Agency Workers Need to Know

Since 2012, all UK employers must automatically enrol eligible workers into a workplace pension scheme. This applies to agency workers too. Here is how it works and why it is usually worth keeping.

Who Is Eligible?

You are automatically enrolled if you:

• Are aged between 22 and state pension age
• Earn more than £10,000 per year (£192 per week)
• Work in the UK

If you are under 22 or earn less than £10,000 but more than £6,240, you can opt in and still receive employer contributions.

How Much Is Deducted?

Contributions are based on "qualifying earnings" — the portion of your pay between £6,240 and £50,270 per year:

• Your contribution: minimum 5% (including 1% tax relief)
• Employer contribution: minimum 3%
• Total: minimum 8% of qualifying earnings

On a salary of £25,000, qualifying earnings are £18,760. Your contribution is roughly £938 per year (£78/month). Your employer adds £563 per year. Plus, you get tax relief — so the real cost to you is less than it appears on your payslip.

NEST

Most agency workers are enrolled into NEST (National Employment Savings Trust) — a government-backed pension scheme. Your money is invested in a diversified fund, growing over time. You can log into your NEST account online to track your pot.

Should You Opt Out?

You have the right to opt out within one month of enrolment. If you do, any contributions already made are refunded. However, think carefully:

• You lose free money — opting out means losing the employer's 3% contribution
• Tax relief means the government effectively tops up your payments
• Compound growth over decades means even small contributions become significant
• The state pension alone (£11,502 per year in 2025/26) is unlikely to provide a comfortable retirement

The only scenario where opting out might make sense is if you have significant debt at high interest rates. Otherwise, the employer contribution alone makes it worthwhile.

What Happens When You Change Jobs?

Your NEST pension pot stays with you. When you start a new agency assignment or job, you may be enrolled into a different scheme, but your previous pot continues to grow. You can consolidate pots later if you wish.