Can you stop paying into your pension? A guide to your options

Find out how to reduce or stop paying into your pension and what you need to know before taking that step.

Thinking about stopping or reducing pension contributions? 

Reducing the amount you pay into your pension can be tempting, especially when times are tough. If you’ve got money worries, consider exploring other ways of managing your finances. MoneyHelper’s free, impartial guidance is a good place to start. Speaking to a financial adviser, who may charge for their services, could also help. 

Read more about getting financial guidance and advice. 

Knowing all your options puts you more in control and helps you make informed decisions. So, before deciding to lower your payments, it’s important to understand what this means. 

Can you reduce your pension contributions? 

Your options depend on both your employer and your pension provider. You can ask your employer whether it’s possible to reduce your contributions below your current level. However, your total pension contributions cannot drop below the minimum auto‑enrolment requirement of 8%. 

You cannot contribute less than this minimum. You can either stop contributions entirely - meaning your employer will also stop contributing - or continue at the minimum level. 

What happens to your pension if you pay less into it?

Paying less into your pension could affect your future, as you may have less savings to support you in retirement. While the money you’ve already saved is yours to keep and will continue to be well managed, contributing less means your pension has less opportunity to grow. You’ll also miss out on extra ‘free’ money in the form of tax relief. 

Can you stop paying into your pension? 

If you need to, you can stop paying into your pension altogether: 

• Opting out is when you decide to leave your workplace pension within a month of being enrolled into it. If this happens, you’ll get refunded through your payroll.  
• If you decide to stop saving into your pension after more than a month, any contributions you’ve already made will stay in your pension until retirement.  

If you stop saving into your pension scheme, you can ask your employer about re-joining at any time. If you don’t re-join, your employer might add you back in through ‘re-enrolment’.   

Employers must re-enrol eligible employees into their workplace pension at least every three years. They have to write to you to let you know this is happening.  

If you opted out before, you can do so again at this point, or re-join if you’ve changed your mind.

What happens to your pension if you stop paying into it? 

Your pension pot remains invested for you, even if you stop paying into it. But what you ‘save’ by stopping won’t be as much as what you’d gain by staying.

When can you use your pension money?  

Most people use their pension to provide an income in retirement once they’ve stopped working, but you can access it from age 55 (rising to 57 from 2028). If you’re still working, any money you take will be taxed as income on top of your salary. Read more about how to take your pension money. 

Remember, there are people out there who may try to trick you into taking your pension money. If it sounds too good to be true, it probably is – please be alert to pension scams. 

Withdrawing your pension is a big step. Fortunately, you can get impartial guidance on making informed decisions from PensionWise – a free service provided by MoneyHelper.