Can I opt out of my pension?

If you’re automatically enrolled into a workplace pension, you might decide to opt out of the scheme. But this could mean you lose valuable retirement benefits.

Can I opt out if I don’t want to join my employer’s workplace pension scheme?

 

If you qualify, but don’t want to join your employer’s workplace pension scheme, you can opt out after you’ve been set up in your employers workplace pension.

When you opt out, your employer doesn't still contribute to your pension.

How can I opt out of my workplace pension scheme?

You need to ask the pension provider for an opt out form so you can opt out of auto enrolment.

Your employer must give you the contact details for the pension provider if you ask for them.

You need to complete and sign the pension scheme opt out form, and return it to your employer (or the address given on the form).

The pension provider might allow you to opt out online.

If you opt out of the scheme within one month of being automatically enrolled, you’ll be treated as if you had never joined the scheme. Any money that you’ve paid in will be refunded in full.

You’ll only get back the contributions you’ve made. You won’t get the contributions your employer might have made, or any tax relief.

If you decide to opt out more than one month after you’ve been set up in your employers workplace pension, any contributions you’ve made will usually be held in the scheme. This will be until you can begin taking the money out of your pension pot when you retire.

This is unless the pension scheme’s rules allow your own contributions to be refunded.

You can’t usually start taking money from your pension pot until you’re aged 55 or over. This rises to age 57 in 2028.

How long does opting out last for?

An opt-out from the pension scheme usually lasts up to three years.

If you’ve opted out, your employer must automatically re-enrol you into the scheme at a later date if you qualify.

If you’re still not ready to join the scheme or start paying contributions again, you can decide to opt out of auto enrolment for another three years.

If you change your mind, you can speak to your employer about opting in to the scheme at any time.

While you can ask to re-join the scheme at any time, your employer only has to address any requests once every 12 months.

Employers must automatically enrol eligible workers who have opted out or stopped contributions every three years. This is because your circumstances might have changed. And saving into a workplace pension to build up money for retirement might now be the right thing for you.

What benefits could I lose if I opt out?

If you're thinking of opting out, or stopping contributions, you might be missing out on valuable retirement benefits. These include:

  • contributions your employer makes into your pension pot
  • tax relief (money that would have gone to the government as tax goes into your pension pot instead)
  • any benefits that your scheme might pay if you fall ill and are unable to continue working before reaching your retirement date
  • any benefits the scheme might pay to your dependants if you were to die.

You can use our webchat to speak to a pension specialist if you want more information.

To find out what benefits you might lose, check the booklet about your scheme. You should have received one, possibly by email, when you joined.

If you haven’t received this, or can’t find it, you can ask your employer or the pension provider for another copy. 

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MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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