Financial & Legal News

Pensions Auto Enrolment – What Happens If I Don’t Comply?

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After recognising that people in the UK are living longer and not saving enough for their retirement, the government introduced pension reforms through the Pension Act 2008 that requires all employers to offer their staff a workplace pension - this has become known as auto enrolment. 

The scheme commenced in 2012, with larger businesses enrolling their staff into a workplace pension. It is envisaged that all eligible employees in the UK will be enrolled into a workplace pension scheme by 1 February 2018.

Whether you are a small shop owner, a SME or a large corporation, you are legally required to offer your staff a workplace pension - even if you employ just one person.

If you don't comply with your auto enrolment duties, the Pensions Regulator may take action. Such action may involve:-

  • enforcement action, including compliance notices, penalty notices and/or fines;
  • if you comply late, you will be asked to backdate any contributions for that member of staff;
  • if you refuse to pay your fine, the Pensions Regulator can recover the debt through the Courts.

Investigating Non-Compliance

The Pensions Regulator has the authority to request information from employers and can issue formal notices asking for information and carry out inspections at the employer's premises. They can also use the Courts, if necessary, to carry out investigations.

How Does the Pensions Regulator Enforce?

The following procedures are followed as a result of non-compliance:-

  • you will be issued with a warning letter with a deadline to meet your duties;
  • if you don't meet your deadline, you may be issued with a statutory notice;
  • if you fail to comply with a statutory notice, you may receive a penalty notice with the following fines:-
  • a fixed fine of £400;
  • if you still don't comply with a penalty notice, you will be fined a daily rate of £50 to £10,000, which will continue to escalate at the daily rate until you comply;
  • if you still don't comply, you may be issued with a prohibited recruitment conduct penalty notice at a rate of £1,000 to £5,000.


Failing to enrol your eligible staff into a workplace pension scheme, ignoring the letters or penalty notices and providing false information should you be investigated, are criminal offences and may lead to prosecution where the maximum punishment is two years in prison.

For further information, please visit the Pensions Regulators website for employers.

For help or advice, please speak to our Pension Specialist, Richard Eastwood, on 0161 785 3500 or email

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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