Money that you pay into a pension is yours for life, though in most cases you won’t be able to take money out of the scheme until you reach the default pension access age. This is currently age 55. It’s due to rise to 57 from 2028. However, if you change your mind quickly about being part of a pension scheme, you may be able to leave and get a refund of the contributions you’ve paid in to date. You’ll rarely have more than 2 years to do this, though, and in some cases may need to cancel or opt out within 30 days. Here’s what you need to know.
Can I get my pension contributions back if I need to?
In some cases, yes, you can claim back your own contributions to the pension scheme. But it depends on the type of pension and how long you’ve been contributing to the scheme.
Does getting a pension refund depend on the type of pension?
Yes. If you have a salary sacrifice workplace pension, you can’t claim back any pension contributions. That’s because payments into a salary sacrifice scheme are classed as employer contributions rather than personal contributions.
For most other types of workplace or personal pension, you may be able to get a refund. The timescale you have for claiming may vary depending on the type of pension.
When can I get a refund of my pension contributions?
When you are eligible to request a refund of your pension contributions depends on the type of pension. In many cases you’ll only be able to claim a refund within 30 days of joining the scheme, though some pensions allow you up to 2 years.
Additionally, if you contribute more to your pension than your earnings in a tax year, you may be able to get a refund of the excess.
What are the downsides of getting a refund of my pension contributions?
If money is tight, you may feel you have no choice but to opt out of your pension scheme and get a refund of your contributions. You might particularly feel this way if you’re in your 20s or 30s and retirement seems a long way off. But it’s a step that’s worth thinking twice about, as it comes with some significant downsides.
Firstly, you won’t have any pension savings from the period for which you’ve requested a refund (and any subsequent period during which you don’t pay into a pension). The longer you save for a pension, the more time your savings will have to grow, and the more money you’ll have to live on in retirement.
Secondly, pension contributions benefit from tax relief. This means you don’t pay tax on money you contribute to a pension scheme (up to an annual maximum). If you get a refund of your contributions, you’ll lose this tax benefit.
Finally, if you pay into a workplace pension, your employer has to boost your pot with its own contributions. The exact amount that an employer pays may vary by scheme. But under standard pension auto-enrolment rules, you pay 5% of your salary and your employer adds an extra 3% – so £750 a year on a £25,000 salary, for example. That’s not to be sniffed at. If you get a pension refund, you’ll lose your employer’s contributions.
If you do decide to leave your scheme and get a refund because of short-term cash flow issues, consider opting back in as soon as you can. The benefits of pensions, and workplace pensions in particular, make them one of the best ways to ensure you have enough income to enjoy your retirement.
How can I get my personal pension contributions refunded?
If you’ve set up a pension independent of your employer, known as a “personal” or “private” pension, you can cancel under the scheme’s automatic 30-day cooling off period. This entitles you to a full refund of the contributions you have made during that period, taking account of any investment gain or loss. The amount you’re refunded won’t include any tax relief that was applied to your contributions.
Some personal pension schemes may give you a contractual right to cancel and receive a refund after 30 days. You’ll need to check with the pension provider if this applies. If not, the money in the scheme will remain invested until you are eligible to take income from it (from age 55). If you’re not happy with the pension provider, you can transfer your pot to another pension scheme.
How can I get my SIPP contributions refunded?
SIPPs (self-invested personal pensions) are a type of personal pension. You have an automatic 30-day cooling off period in the same way as you do for any personal pension scheme. If you cancel before this point, you get your contributions back as explained above. After 30 days, whether or not you can get your contributions back depends on the specific scheme, so you’ll need to check what contract terms apply.
How can I get my defined contribution workplace pension contributions refunded?
If you’ve been auto-enrolled into your employer’s defined contribution workplace pension, you can opt out within a month of your employer adding you to the scheme by contacting your pension provider. You can get back any money that you’ve already paid by asking for a short service refund. You won’t get any contributions made by your employer, though. Money refunded is taxed (at 20% on the first £20,000). The money is usually paid to your employer in the first instance. It will then pay you the refund you’re entitled to.
After 30 days, while you can opt out of making further payments into the scheme, you usually can’t get a refund of contributions. There may be some exceptions, depending on the scheme. The money will remain invested until you are eligible to take income from it (from age 55). If you’re not happy with the pension provider, you can transfer your pot to another pension scheme.
If you are a member of a defined contribution workplace pension that you proactively joined (rather than being auto-enrolled), the rules may be different. Ask your employer about your options.
How can I get my defined benefit workplace pension contributions refunded?
If you’re enrolled in your employer’s defined benefit pension, such as a final salary or career average pension, you may able to get a refund of your contributions if you’ve been a member for less than 2 years. This may depend on the terms of the specific scheme, though, so if you think there’s a chance you might need to get your money back it’s worth checking at the outset.
As with defined benefit workplace pensions, you’ll be taxed on your contribution refunds (20% on the first £20,000). Plus, your refund won’t include any contributions that your employer has made.
Do I lose my employer’s contributions if I get a refund of my workplace pension?
Yes. This is one of the major downsides of getting your workplace pension contributions refunded. To get a refund of your contributions, you’ll need to leave your employer’s scheme entirely. While you’ll get your personal contributions back (minus the tax relief you originally benefited from on these contributions), your employer will get the refund of the contributions that it has made.
You can usually opt back in to your employer’s scheme at any time. Even if you don’t, you’ll be automatically re-enrolled after a maximum of 3 years. But you’ll have missed out on employer contributions to your pension while you were opted out. That’s effectively giving up “free” money that you’d have otherwise had to boost your retirement income.
Can I get a refund if I’ve contributed too much to my pension?
You can only receive tax relief on pension contributions up to the level of your taxable UK earnings (or £3,600, if this is lower). If you have made personal contributions in excess of 100% of relevant UK earnings for income tax purposes, you may be able to get a refund of this excess. This is known as a “refund of excess contributions lump sum”.
While most people are unlikely to pay more into their pension in a given year than their taxable earnings in that year, there may be the odd occasion where it happens. For example, you might receive an inheritance and choose to pay some of it into your pension, Or, a parent or partner might make contributions to your pension on your behalf.
This type of refund isn’t subject to the time restrictions that usually apply to pension contribution refunds.
Here’s an example of how this might work.
Your taxable earnings in the 2022/23 tax year are £30,000.
In the same tax year, your total contributions to a personal pension add up to £37,500 (£30,000 payments into the account, plus £7,500 tax relief added to your pension pot).
Your pension contributions exceed your taxable earnings by £7,500.
In this case, your pension provider would refund a total of £7,500, with £6,000 going directly to you. The extra £1,500 (the tax relief that had been added to your pension pot) would be repaid to HMRC.
How long does a refund take?
This is likely to vary depending on your circumstances, the type of pension and the specific pension provider. Nest says on its website that if you opt out of a workplace pension within the 30-day opt-out period, it takes up to 10 working days for it to refund contributions to your employer’s account. Once an employer has the refund, it is responsible for getting it to the employee.
Bottom line
Paying into a pension is one of the best ways to save for retirement and comes with plenty of perks, including tax relief and (for workplace pensions) employer contributions. So, if at all possible, it’s best to leave your pension savings invested. You can always transfer them to another scheme if you’re not happy with your provider. If you do decide you need your contributions refunded, make sure you understand the rules and restrictions so that you don’t miss your window.
Finder survey: Would you ever stop paying into your workplace pension to use the money for something else?
Response
No
49.42%
I don't have a workplace pension
26.55%
Yes
24.03%
Source: Finder survey by Censuswide of Brits, December 2023
Frequently asked questions
A pension contribution refund is where you are paid back the personal contributions you have made to a pension before you reach the default pension access age (at least 55). This involves leaving, or “opting out”, of the pension scheme. You will lose any tax relief you benefited from on pension contributions. You’ll also lose any contributions made by your employer.
If you want to opt out of a defined contribution workplace or personal pension scheme and get a refund of payments, you automatically have a 30-day period to do so. Some schemes let you leave and get a refund within 2 years of membership, but this can vary by provider.
No. The idea of a pension contribution refund is that you can get the money you’ve contributed back before you retire and start drawing your pension. But you can’t request a refund if you’ve been a member of a scheme for more than a certain time (in some cases as little as 30 days), and you’ll miss out on tax relief on the contributions you’re refunded. So, it’s best to keep the money invested if you can. The earliest you can start officially drawing a pension is age 55 (due to rise to age 57 from 2028). At this point, it no longer counts as a refund – it’s simply accessing your pension.
You can’t get a refund of contributions made to a salary sacrifice pension scheme, as these don’t count as personal contributions. And you can’t get a refund if you’ve been a member of a scheme for more than a certain period. This can be as little as 30 days, though some schemes may allow longer – up to 2 years, for example.
Pensions are long-term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply. Keep in mind that the tax treatment of your pension and investments will depend on your individual circumstances and may change in the future. Capital at risk.
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Ceri Stanaway is a researcher, writer and editor with more than 15 years’ experience, including a long stint at independent publisher Which?. She’s helped people find the best products and services, and avoid the pitfalls, across topics ranging from broadband to insurance. Outside of work, you can often find her sampling the fares in local cafes. See full bio
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