How to Register for a Nest Pension Scheme
A practical guide to setting up Nest for workplace pension auto-enrolment — plus a quick reminder of when and why you need to register as an employer.
First — when and why you need to register as an employer
Before you can set up a workplace pension, you need to be a registered employer. You must register with HMRC as soon as you decide to take on staff — including paying yourself a salary as a director — and no later than the first payday. HMRC won't let you backdate registration if a payday is missed, so plan ahead.
Once registered, you'll receive your PAYE reference and Accounts Office reference. Both are essential for running RTI submissions and for opening your Nest account.
Separately, The Pensions Regulator (TPR) will write to you with your Letter Code and staging duties start date. From that date, auto-enrolment rules apply: any employee aged 22 to State Pension age earning over £10,000 must be enrolled into a qualifying scheme within their first three months of employment.
Even if you have no eligible staff (e.g. a sole director), you must still submit a Declaration of Compliance to TPR within 5 months of becoming an employer. Failure to do so triggers automatic fines.
Setting up Nest — step by step
- Have your details ready. You'll need your company name and address, PAYE reference, Accounts Office reference, the date your auto-enrolment duties started, and a bank account for Direct Debit collection.
- Create an account at nestpensions.org.uk. Choose "Employer sign up" and follow the prompts. You'll set up a primary contact and login credentials.
- Add your group and payment source. A "group" defines the contribution rates that apply (typically the statutory minimum) and a "payment source" is the bank account contributions are collected from.
- Connect your payroll software. Most modern systems (Xero Payroll, BrightPay, Sage, QuickBooks) push contribution files to Nest automatically. You'll generate an API key or upload CSV files each pay run.
- Enrol eligible workers. When you run payroll, your software assesses each employee against the auto-enrolment rules and either enrols them or records why they were not enrolled.
- Complete your Declaration of Compliance. Within 5 months of your duties start date, log into the TPR portal and confirm your scheme details. This is a one-off filing and is legally required.
Minimum contributions and ongoing duties
The statutory minimum total contribution is 8% of qualifying earnings — with at least 3% from the employer and the remaining 5% from the employee (which includes basic-rate tax relief). Qualifying earnings for 2025/26 are between £6,240 and £50,270.
Every three years you'll also need to re-enrol any eligible workers who previously opted out, and submit a fresh Declaration of Compliance. Diary it in — TPR will not always remind you in time.
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Common Questions
Do I have to use Nest for auto-enrolment?
No — you can use any qualifying workplace pension provider. Nest is the government-backed scheme set up specifically for auto-enrolment and accepts every UK employer regardless of size, which is why it's the most common choice for small businesses and director-led companies.
When do I need to register as an employer with HMRC?
You must register as an employer with HMRC before the first payday — and no more than 2 months in advance. Once registered, you'll receive a PAYE reference and Accounts Office reference, which you'll need to run payroll and to set up your Nest scheme.
Do I need a pension scheme if I'm a sole director with no other staff?
If you're the only person on the payroll and you don't have an employment contract, auto-enrolment duties usually don't apply — but you must still complete a Declaration of Compliance with The Pensions Regulator confirming this. We handle this as part of our payroll service.
What are the minimum contributions?
The statutory minimum is 8% of qualifying earnings — at least 3% from the employer and the rest from the employee (typically 5% including tax relief). Contributions are calculated on earnings between the lower (£6,240) and upper (£50,270) qualifying thresholds for 2025/26.
How long does it take to set up Nest?
You can set up an account online at nestpensions.org.uk in around 15-20 minutes. You'll need your PAYE reference, Accounts Office reference, employer details, and bank details for Direct Debit. Most payroll software (including Xero Payroll and BrightPay) integrates directly with Nest.
Want us to handle pensions and payroll for you?
We set up Nest, run your monthly payroll, file RTI submissions, and complete your Declaration of Compliance — all included in our business plans. Get in touch for a free call.