Auto Enrolment…The Way Forward

July 12, 2023

Retirement…not a concept at the forefront of a young person’s mind when starting their career. In fact, thoughts of ensuring financial stability during those golden years are often put to one side for too long. It is never too early to start saving toward your future and there’s no doubt that the sooner you start, the better.

Auto Enrolment 

Pension Auto Enrolment is a government initiative designed to encourage individuals to save for their retirement. It requires employers to automatically enrol eligible workers into a workplace pension scheme and make contributions on their behalf. The concept has gained traction in many jurisdictions to encourage retirement saving and financial security for resident individuals in their later years.  

The United Kingdom is recognised as a pioneer in pension Auto Enrolment with legislation mandating that employers automatically enrol eligible employees into a workplace pension scheme being introduced in 2012. Since then, pension Auto Enrolment has inspired similar initiatives in other countries like Australia and New Zealand, with Ireland and some Scandinavian nations also adopting or considering implementing Auto Enrolment mechanisms.

Auto Enrolment in Gibraltar 

August 2021 was a turning point for the private sector in Gibraltar as Auto Enrolment began phasing in. Two years on, it is now mandatory for all ‘large’ private sector employers to implement workplace pensions for eligible employees. The Act ensures that all private sector employees are given the opportunity to become members of a pension scheme once they have completed 12 months of employment and are earning £10,000+ per annum. 

The implementation of the Act is phased, based on the number of employees. Employers are required to comply by the following deadlines:

Size of

Number of

Implementation Deadline

Enterprise Employer

251 or more

On or before 1 July 2021


101 to 250

On or before 1 July 2022


51 to 100

On or before 1 July 2025


15 to 50

On or before 1 July 2026


14 or less

On or before 1 July 2027

Both the employer and employee are required to contribute a minimum of 2% of the employee’s salary (except where an employee “opts out” due to personal reasons.) The employer can also choose to cover the employee’s 2% as an added ‘bonus’.

The Impact

While the impact of pensions Auto Enrolment is generally positive it is important to note the effectiveness will vary based on the level of contributions, specific pension period and overall retirement landscape of a country. 

There’s no denying that Auto Enrolment has placed emphasis on the importance of thinking about retirement. While some employers may see this as an inconvenient mandatory added expense, a quality employment benefits package including retirement provisions will not only enhance the company’s reputation as an employer of choice but will also create further incentive when recruiting (and retaining) the best talent. Furthermore, it can improve motivation, offer a greater sense of financial security, and reduce the stress associated with approaching retirement – all contributing to a happier workforce.

Talk to Us

Are you an employer looking for assistance to meet your Auto Enrolment pension obligations?  We will ensure that your business is compliant, your workforce is happy, the process is simple  and the impact on business operations is minimal. Speak to our Gibraltar team about the options available to you.

Read more about our Gateway Multi-Employer Pension Scheme and Gateway Personal Pension Scheme for Employers.

By Erica Power

Head of Pensions Business Development, Gibraltar