If your Contract of Employment says that being in the pension scheme is compulsory, you won't be able to opt out of the pension scheme.
If your employer has not made their pension scheme compulsory, you can ask to join the scheme if you meet the eligibility criteria. You will always have the option to opt out at any time. Your employer is not allowed to encourage you to opt out of the pension scheme or offer you additional pay if you opt out. They are also not allowed to dismiss you for asserting your right to join the pension scheme.
If you can opt out of the pension scheme you are advised to think carefully before doing this. Pensions are very important, and it is much better to start saving for retirement as soon as you can. A lot of people underestimate how much they need to save for retirement and an extra few years of contributions can make a big difference to the pension you receive when you retire, especially as pension posts can run out.
Before you make any decision to opt out of the pension scheme make sure you think very carefully about the amount of money you will need to live on in retirement. Your employer may encourage you to join a pension scheme as early as possible. There can be valid reasons why you decide to opt out and your personal circumstances could mean that not being in a pension scheme is the best option for you.
How do I opt out?
- If you decide to opt out of the pension scheme you will need to provide written confirmation to your employer that you no longer wish to contribute to your pension.
- This could be done by a form, formal letter, or email exchange; your employer is able to decide what works best for them so you should ask them how they want to be notified. Your employer will keep this record in line with their own data protection protocols.
- If you are opting out of the pension after you have been given a Notice, you will need to record your decision on the Notice and return it to your employer.
- If you had completed a Notice choosing the scheme you wanted to be in but have changed your mind and want to opt out you will need to let your employer know. This could be done by a form, formal letter, or email exchange; your employer is able to decide what works best for them so you should ask them how they want to be notified. Your employer will keep this record in line with their own data protection protocols.
What happens after I've opted out?
- If you choose to opt out of the pension scheme your employer will be only be required by Law to enrol you back in 3 years after you opted out of the scheme if you become a Designated Employee.
- For information on Designated Employees please follow the link to the Designated Employee page.
- It is important to remember that there are long-term benefits for you when you start saving early for your retirement. Your employer may encourage you to join a pension scheme as early as possible. There can be valid reasons why you decide to opt out and your personal circumstances could mean that not being in a pension scheme is the best option for you. As circumstances can change, you may find yourself in a position to be able to join a scheme.
How can I opt in?
- If you have previously completed a Notice to confirm that you wished to opt out of the pension scheme but have changed your mind, you will need to provide your employer with a written instruction that you wish to join their pension scheme.
- You will need to provide a written instruction to your employer. When your employer adds you back in, they will do this either within one month of your request, or within 3 months of the date you opted out, depending on which one is the later date.
- For example, if your employer doesn't defer enrolling into their pension scheme, if you opted out of the pension scheme on 14 August 2025 and asked to be added back in on 18 September 2025, your employer would have until 14 November 2025 to add you back in. This is because you were asking to join the scheme within 3 months of opting out. However, if you opted out on 14 August 2025 and then asked to be added back in on 12 December 2025, they would need to do add you back in by 11 January 2026 as they would only have one month to add you in again.
