Firms with over 120,000 employees will automatically start enrolling their employees between 22 and state pension age who earn over £8,105 into a company pension scheme.
Employers will contribute three per cent of earnings, individuals four per cent of earnings plus one per cent tax relief to make a total contribution of eight per cent.
If employees do not wish to contribute to the scheme, they can choose to opt out. Even if they do opt out, they will re-enrolled every three years and will need to opt out again if they wish.

The Department for Work and Pensions has estimated it would like to see 500,000 people saving into a pension for the first time by Christmas. This is especially targeted at those aged 22-29 where only 24 per cent are saving into a pension.
Steve Webb, minister for pensions, said: "Automatic enrolment is the biggest boost to pensions for over a century. By the time all employers are included, millions more people will be saving for their old age, with over half a million new savers in workplace pensions by Christmas.
There will be staging dates over the next six years to eventually enrol all employees, regardless of company size, by 2018.
It is estimated up to 11 million people in the UK are not saving enough for retirement.