Opting out of your workplace pension

Thinking of opting out? Here’s how it works, what you could miss out on, and how to rejoin later if you change your mind.

What does opting out mean?

If you choose to leave your workplace pension, it’s called opting out.

Auto-enrolment was introduced by the government to help people save for retirement. It means that instead of having to ask to join your workplace pension scheme, all eligible employees are automatically enrolled. Eligible employees are those who are aged 22 or older, earn at least £10,000 per year, and work in the UK.

After being enrolled, you have the option to leave the pension scheme.

Before you opt out

Before you opt out, you should think about what it could mean for your future:

You’ll be saying no to ‘free’ money paid into your pension by your employer and the government each month.
Pensions historically generate better returns compared to putting your money in the bank.
Will you have enough money for the retirement you want? Saving for longer gives your pension a greater chance to generate long-term growth, so your savings are worth more in retirement.

Read more about workplace pension contributions.

Staying on top of your retirement plans

If you decide to opt out, it’s worth thinking about how you’ll save for your future. Even if you can get the full State Pension, it’s unlikely to be enough to live comfortably on.

Thanks to employer contributions and government tax relief, workplace pensions are one of the most tax-efficient ways to help your pension savings grow. Any money you’ve paid into your pension will stay invested until you can access it. But if you leave, you may have to work for longer to plug the gap and have enough money in retirement.

How to opt out

If you want to opt out, you’ll need to let us know. You can’t opt out before you’ve been enrolled and received your joiner information. By law, your employer must enrol you if you’re eligible, even if you tell them you don’t want to join.

When you contact us, please confirm:

Your customer number – you can find this on your joiner letter
Your National Insurance number
Your date of birth

There are 2 ways to contact us:

Online
Call our automated opt out phone service on 0300 3301 280

Is there a deadline for opting out?

Yes, if you decide to opt out, you have one calendar month from the date you were enrolled to do so. If you opt out within this period, your contributions will be refunded. We’ll return them to your employer, who’ll refund you through payroll.

If you choose to leave after this initial opt-out period ends, you won’t get a refund of anything you’ve already paid in. This will stay invested in your pension until you reach the age you can normally access your pension savings. This is currently age 55 (but it’s rising to 57 in 2028).

If you’ve been contractually enrolled or you’re an ‘entitled worker’, you won’t be able to opt out and receive a refund. But you can leave the pension scheme by writing to your employer.

Being an ‘entitled worker’ normally means that you’re aged between 16 and 74, earn less than the lower earning threshold (currently £6,240 a year / £520 a month / £120 a week) and work in the UK.

How to rejoin later

If you decide you want to rejoin your pension scheme again, you can ask your employer to opt back in by writing to them.

By law, every three years your employer must put you back into the pension scheme. This is called re-enrolment. You can opt out again if you want to.

Still not sure?

We’re here to help. Get in touch