Last reviewed 9 September 2020

Almost one in 20 workers are being “under-enrolled” in company pension schemes by receiving less than the minimum legal contributions, or no contributions at all, with under-enrolment particularly acute among agency staff and minimum-wage workers.

This is the finding of new research published by independent think tank the Resolution Foundation which has calculated that as many as 800,000 workers could be affected.

Its report, “Enrol up!” (, considers the extent of non-compliance with auto-enrolment, and whether there are under-enrolment hotspots that require closer scrutiny.

The levels of under-enrolment uncovered by the report are in addition to the 9% of employees who actively opt out of paying into their company pension scheme, or the 19% of workers who are currently outside of auto-enrolment for eligibility reasons, including one-in-four working women.

The report notes that overall auto-enrolment has been a success, with over 10 million employees joining company schemes since 2012. It adds that compliance activity — led by The Pension Regulator) — has been relatively light-touch to date, with fines used only sparingly, creating little hard financial incentive for firms to comply.

However, the Resolution Foundation highlights that, while 2.9% of permanent employees have not been enrolled, this rises to 10.5% among agency workers, 7.4% among temporary workers and 8.6% among workers earning within 5p of the National Living Wage (NLW).

Hannah Slaughter, Economist at the think tank, said: “Now is the time for the Pensions Regulator to step up its enforcement — supported by greater resources — as part of a wider agenda for the Government to make Britain’s post-Covid labour market a better environment for workers, and a far tougher one for the small minority of firms that break the law.”

Non-enrolment is particularly common in low-paying sectors, such as admin and support services (6.9%), agriculture (4.7%), and hotels and restaurants (5.7%) where, even of those who have been enrolled, 3.1% are not receiving the pension contributions to which they are legally entitled.

Comment by Croner Associate Director Paul Holcroft

Employers may not realise the gravity of under-enrolling employers to a pension scheme as a possibly illegal act.

Though there may be various reasons why some employers under-enrol or fail to follow auto-enrolment procedures — such as not fully understanding the employment rights of both workers and employees or miscalculating how much employees are entitled to — it is still crucial that employers look into their staff pension schemes to ensure that they are adhering to the law.