The largest firms in the UK have already started enrolling their workers into pensions saving schemes, medium-sized firms are starting now and smaller businesses will go through the process before 2018.
"Today is a real landmark in this quiet revolution, finally reversing decades of decline in pensions saving," said Steve Webb, minister for pensions.
He added: "This is the biggest change to the pensions system for a century. The money workers save is being matched by contributions from their employers and topped-up by tax relief, helping them put money aside for their retirement, many for the first time."
However, Office of National Statistics (ONS) figures released this week showed the number of active members in employer-sponsored pension schemes has fallen to its lowest level in 60 years, driving home the need for auto-enrolment.
The ONS said there were 8.2 million active members of occupational pension schemes in 2011, the lowest recorded level since the 1950s.
Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), called the figures bleak.
"Pension uptake was shrivelling at a seemingly unstoppable rate," she said.
"Without auto-enrolment the UK would be well on course for a crisis in paying for its old age."