If you’re a limited company contractor, you may occasionally receive communications from The Pensions Regulator (TPR) about workplace pension duties, especially around re-enrolment cycles or if your circumstances have changed.
What is pension auto-enrolment?
Successive UK governments have aimed to address the worrying low level of pension savings across all sectors of the workforce.
With this in mind, the Pensions Act 2008 introduced requirements for employers to provide a qualifying workplace pension scheme and to automatically enrol eligible workers.
All employers were brought within the scope of auto-enrolment by 2018.
As a result, umbrella company workers are typically auto-enrolled (with opt-out rights).
However, for limited company contractors, auto-enrolment obligations depend on whether anyone in the business qualifies as a “worker” for AE purposes.
Most single-director or small family-run limited companies have no AE duties for directors.
Director (one-person company only)
If you are the sole director of a limited company, employ no other staff, and you do not have a contract of employment with your company, you are generally not treated as a worker for AE purposes.
Your company, therefore, has no automatic enrolment duties for you as the sole director.
Note: a director’s service agreement is not automatically the same thing as an employment contract for auto-enrolment. What matters is whether you are genuinely engaged as an employee under a contract of employment.
Even if you receive a re-enrolment or compliance notice, you usually do not need to enrol yourself, but you may need to re-declare continued non-liability if TPR prompts you during a cyclical review.
No formal “exemption application” is required in most cases, but confirming your status (and keeping a record of what you submitted) is sensible.
Find out more here:
- Directors and automatic enrolment – do you have duties? (The Pensions Regulator)
- I’m the only director of my own company – do automatic enrolment duties apply to me? (TPR)
Multi-director (e.g. husband and wife or family business)
Directors are assessed individually. Duties apply only if:
- A director has a contract of employment (written, implied, or verbal) with the company, and
- They meet the age and earnings criteria (aged 22 to State Pension age, earning over £10,000 a year).
In most contractor family companies, directors do not have employment contracts and are paid via dividends and/or a director’s salary, without being treated as employees. If the company has no other staff, AE duties typically do not apply.
Common edge case: duties can arise if one director (or a family member) is engaged under an employment contract, even if the other director is not.
If duties do apply to any director (rare in contractor set-ups), you must enrol them into a qualifying scheme unless an exemption applies.
Find out more here:
- We’re a family business – do automatic enrolment duties apply to us? (TPR)
- Director exemptions from automatic enrolment (TPR).
Company secretaries
Company secretaries are usually “office holders” (not workers) and rarely have employment contracts.
If they are paid a salary, it could imply an employment contract is in place, but this rarely triggers AE duties in small director-only companies. If you do pay a company secretary through payroll, it is worth checking their status carefully.
Different classes of workers (if you ever employ staff)
- Eligible jobholders: Aged 22 to State Pension age, earning £10,000+ per year (based on how AE earnings are assessed) → must be auto-enrolled.
- Non-eligible jobholders: Earning £6,240 to £10,000 → a scheme must be offered (they can opt in), but no automatic enrolment.
- Entitled workers: Below £6,240 → can request to join, but there is no obligation to auto-enrol them.
These thresholds are frozen at these levels for 2025/26 and 2026/27.
In small firms, salary and dividend planning can sometimes affect whether someone falls into a worker category, but you should be careful not to set pay purely to avoid duties if someone is genuinely an employee.
Further information
- The Pensions Regulator (official site) – start here for tools, guidance, and to check your status.
- Automatic enrolment section (TPR) – detailed employer duties.
- MoneyHelper – automatic enrolment introduction – clear, impartial explanations.
The ii Which? Recommended SIPP for contractors
This article is provided for general information only. If you are unsure about your obligations, you should check the official guidance from The Pensions Regulator or seek advice from a qualified accountant or pensions adviser.