The real cost of opting out
Lesson 7 of 13 in our free Pensions guide: a 5-minute money game with the key points below.
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Questions you'll answer
Priya pays £57 a month into her pension (including tax relief) and her employer adds £34. If she opts out, how much extra take-home does she get vs what she gives up?
Quick facts
- Opt out within one month of enrolment and you get your contributions back → True. That's the opt-out window.
- Your employer can pressure you to opt out → False. That's illegal. Employers mustn't encourage you to opt out.
- You'll usually be re-enrolled about every three years → True. Re-enrolment gives you another chance to stay in.
- You can opt back in later → True. You can usually ask to rejoin.
- Fact: “It's illegal for an employer to offer you a job on condition you opt out.” — Employers can't induce you to opt out.
- Myth: “Opting out has no long-term cost.” — Lost employer money plus decades of growth on it can add up to a lot.
- Fact: “If money is genuinely tight, pausing contributions is a valid choice to make knowingly.” — Your choice — just know what you're giving up, and rejoin when you can.