You're not sure if a workplace pension is right for you
Your situation will influence how a pension from your employer can benefit you or if you need to opt out. Find out how already having a pension, being in debt and your age may affect your decision to stay in a workplace pension or not.
Already have a personal pension
If you already have a personal pension, you need to think about what you can afford and what your personal and employer’s pensions are offering. The Pensions Advisory Service might be able to help you. The Pensions Advisory Service is an independent, non-profit making organisation which provides free advice about pensions.
Debt
For many people, paying into a workplace pension is a good idea, even if you have other financial commitments, such as a mortgage or loan. This is because you could benefit from contributions from your employer and the government, in the form of tax relief. Over time, this money adds up and can grow. You should make sure first that you can afford to meet your other commitments.
If you’re behind on your mortgage, rent, credit card or other debt payments then a pension might not be the right step at the moment. It’s something you should come back to at a later date, once your debts are more under control.
If you’re struggling with debts and would like advice on managing your money, you might find the Money Advice Service a good starting point.
Think you’re too young
It may seem early to start planning for later life but remember you could have twenty years of retirement and you will need an income. A workplace pension is one way to provide that income. As well as your payments, you could benefit from contributions from your employer and the government. Usually, the younger you are when you start paying into a pension the better. The money has more time to grow.
So even if it’s only a small amount, the money you put away early in life can build up over time.
Think you’re too old
Unless your retirement is just a few months away, there’s still time to build up some money for your later years. And staying in a workplace pension is worth considering.
Unlike other ways of saving, being in a workplace pension means you aren’t the only one putting money into your pension. If you earn more than £5,035 a year, your employer has to contribute too.
You will get a contribution from the government in the form of tax relief. This means some of your money that would have gone to the government as income tax, goes into your pension instead.
When you retire, you might be able to take your pension savings as a cash lump sum. You can do this if your total pension savings are no more than a certain amount (currently £18,000). You have to be at least 60 to do this. For some types of workplace pensions you might also be able to take your pension savings of less than £2,000 as a cash lump sum, regardless of any other pension saving you may have. To find out more, check with whoever runs your pension scheme.
Already have a pension pot worth more than £1.75 million
If you already have a pension pot worth more than £1.75 million pounds and have enhanced protection with HM Revenue & Customs, you need to opt out of your workplace pension. If you don’t, you’ll lose your right to tax relief on your existing pension pot.
Fixed protection for pension savings of more than £1.5 million
Fixed protection replaced enhanced protection from 2011. If you have fixed protection you should opt out of your workplace pension if you want to keep that fixed protection status. You should do the same if you expect your pension savings to exceed £1.5 million and will apply for fixed protection.
If your circumstances are not described here, see 'special circumstances and your workplace pension'.
A note about the earnings figures
If you earn more than £5,035 a year and you are in a workplace pension, your employer has to contribute to it. If you earn £5,035 or less a year, your employer does not have to contribute, but can choose to do so.
Please note the earnings figure listed above (£5,035 a year) may change each April. If it does, this web page will be updated. These earnings figure applies however regularly you get paid, for example, daily, weekly, monthly, or four weekly.
How safe are pensions
If you’re not sure how safe your pension is, find out more.
Opting out of your pension
If you decide that this pension isn’t right for you, find out what you need to do.
Student finance
Get help with rates
Passports
