In October 2012, the government started a phased implementation of the auto-enrolment scheme. This made it a legal requirement for businesses to enrol certain employees in a pension scheme and contribute to it.
As such, if you’re employed, you will likely have a workplace pension, and this is one of the best retirement saving tools you have at your disposal.
However, the nature of auto-enrolment means that your employer sets up the pension scheme on your behalf, often without much input from you at all. If you don’t know all the details of your workplace pension, it could be more challenging to take full advantage of opportunities to build wealth.
Read on to learn five important questions to ask your employer about your pension.
1. What type of pension scheme am I enrolled in?
First, you need to know what kind of pension scheme you’re enrolled in as this will affect the way that you eventually access your savings when you retire.
There are two main types of pension you may be contributing to.
Defined contribution
Both you and your employer pay into a defined contribution (DC) pension and you build up a savings pot. Those funds are typically invested on your behalf, and this means they will very likely grow over time. You can typically start drawing your savings from the normal minimum pension age (NMPA) of 55.
Once you retire, you can take as much or as little as you like from your pension, and the rest of the funds remain invested. You could also choose to purchase an annuity using your fund, which guarantees a retirement income for a set period. Crucially, once you have spent your pot, you can no longer draw an income.
Defined benefit
Defined benefit (DB) pensions, sometimes called final salary or career average pensions, are less common than they used to be, but some workplaces do still offer them. If you’re enrolled in a DB scheme, you will contribute every month and then when you retire, you normally receive a set income for the rest of your life.
The amount you receive and when you can access your savings will vary depending on the scheme. As such, it’s important to discuss the details of your pension with your employer so you know what level of income you can generate in retirement.
Understanding what type of pension scheme you’re enrolled in means you’re clear about how you will build wealth, and any stipulations that could affect how you access your savings.
2. How much am I contributing to my pension?
As you build wealth for retirement, it’s important to know how much you’re saving each month.
Auto-enrolment rules specify that if you are between 22 and State Pension Age, and meet a certain earnings threshold, you and your employer must contribute to a pension.
In 2025/26, the earnings threshold is either:
- £10,000 a year
- £833 a month
- £192 a week.
The minimum pension contribution for anybody that meets one of these criteria is 8%. You must pay 5% of this, while your employer contributes 3%. However, you and your employer are both free to contribute more than this.
It’s worth asking your employer what you’re paying in, and how much their contribution is. We can use cashflow planning to model how much you are likely to have in your retirement pot, based on your current contributions.
Using this information, you might decide that you’re happy with your current level of contributions. Alternatively, you may want to pay more into your pension.
3. Will you match increased contributions?
If you want to pay more into your pension each month, you can ask your employer and they will arrange for your contributions to change. You may want to check whether they’ll match your increased contributions too.
Not all employers will agree to this, but some will. If they do match your payments, you could significantly increase the size of your retirement pot.
4. Do you offer a salary sacrifice scheme?
Salary sacrifice could be a more tax-efficient way to build your retirement pot, so you may want to find out if your company offers this option.
A salary sacrifice scheme allows you to exchange (or sacrifice) a portion of your earnings for an alternative benefit. This could include a company car, private healthcare, or pension contributions.
When you make pension contributions through salary sacrifice, your employer reduces your salary by a certain amount and then contributes that money directly to your pension. As such, your salary is technically lower.
This could benefit you because your Income Tax and National Insurance contributions (NICs) are calculated based on your salary. Consequently, you could pay less tax and your take-home pay may increase, while your pension contributions remain the same. Your employer may benefit from reduced NICs too.
While salary sacrifice can be a valuable tax-efficient strategy, it’s essential to consider the broader financial implications. For instance, a reduced taxable income can affect your borrowing capacity, particularly when applying for a mortgage, as lenders often assess eligibility based on salary multiples.
It may also lead to lower entitlements for benefits like life insurance, maternity pay, or redundancy packages – many of which are calculated on your post-sacrifice salary.
As with any financial decision, careful planning and a clear understanding of the trade-offs are key to making it work for your long-term goals.
5. Can I make changes to the investment options within my pension?
Any investment growth you benefit from on your pension savings increases the size of your retirement pot, meaning you can enjoy a better quality of life in your later years.
Many pension providers allow you to choose how your wealth is invested. You might be able to select from various funds focusing on different industries, sectors, or geographical areas. Changing funds also allows you to adapt the level of risk you’re exposed to and could help you ensure you generate the growth you require. Additionally, you might consider your ethical values and invest in sustainable funds.
If you haven’t made any changes, you’re likely invested in the default fund. This may not align with your goals, attitude to risk, or ethical values. That’s why it’s important to find out from your employer how you can review the investment options for your pension. Often, you can do this yourself through an online portal.
Asking your employer these simple questions will give you clarity about your pension savings and help you build wealth more effectively.
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Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate cashflow planning and tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.