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, Designated Employees will be enrolled automatically, Voluntary Employees can ask to join the scheme if you meet the relevant 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 pots 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. 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.
- 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.
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 are, or become, a Designated Employee.
- This is done because your circumstances may have changed since the last time you were enrolled. You will be able to opt out again if you don't feel it is the right time for you. Your employer will let you know when they are going to enrol you back in and provide you with a Notice and details of the pension scheme you will be joining. It might not be the same scheme you were automatically enrolled into last time.
- If you decide to opt out within 6 weeks of being enrolled then you and your employer will be paid a refund of the contributions, if you opt out after the 6 week period the contributions already paid will be invested into the pension scheme until you retire or transfer it out to another scheme. The refund might be paid to your employer so they can pass this onto you in your salary; you will need to speak to your employer to confirm what has been agreed with the pension scheme and how you will receive your payment.
- 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 as a verbal instruction to them will not be sufficient. When your employer adds you back in, they will do this either within 1 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.
I've opted out but my employer has offered to pay the employer pension contributions into a scheme, do I have to join it?
- You would need to check your contract of employment to see if there is a requirement for the contributions to be paid, if there isn't and you opt out of the pension scheme your employer doesn't have to pay any contributions under the Secondary Pensions Law. Your employer could offer to make payment of the contributions into a pension scheme for you as part of their remuneration package. You would need to discuss with them how this would work and it will be up to you whether you accept this offer. Regardless, they would still need to re-enrol you into a pension scheme within 3 months of the 3rd anniversary of your opt out.
