Understand your options if you have decided to opt out of your NHS pension but are continuing to work for the NHS

On this page:

  • Thinking about opting out
  • How to opt-out
  • Practitioner opt-out information

Thinking of opting out

Thinking of Opting-out

Although you’re automatically enrolled in the NHS pension scheme, your membership isn’t compulsory. You can choose to opt out at any time after joining.

If you’re thinking of opting out of your NHS pension, remember that if you do, you’ll miss out on a range of valuable benefits for you and your family. Your pension is an important part of your total reward package because your employer pays a significant pension contribution on your behalf. It also gives you peace of mind to know that you’ve started planning for your retirement. Make sure to look at our short video on the benefits of your pension before you decide, and you might want to speak to an independent financial advisor or the Money and Pensions Service.

The decision you make isn’t final and you can re-join the scheme at any time by contacting your employer. If you opt out of the scheme, and you’re still employed by the NHS in Scotland, your employer will automatically enrol you back into the scheme every three years. You’ll also be automatically enrolled in the scheme if you start a new contract.

There are some common reasons why people consider opting out of their pension scheme. Have a read to see if this applies to you.

Is it too early or late to think about my pension?

It’s never too early or too late to start building up a pension, but the earlier you start the better your pension will be. Think about the lifestyle you want in retirement, and how this will be paid for.

I have other financial priorities and need the money for other things

Although it may seem that you’re paying a large amount of your pay towards your pension every month, your pension contributions are not taxed and therefore your contributions actually cost you less than the amount shown on your payslip. Your tax is worked out on your pay after your pension contributions have been taken.

I am concerned about tax on my pension and annual allowance implications

The Annual Allowance is the maximum value of the growth in your pension savings each year that can benefit from tax relief. If the growth in your pension savings over the tax year are more than the Annual Allowance of £60,000, you might have to pay a tax charge based on the amount of the Annual Allowance. Find out more by looking at our information on tax on your pension.

How to opt out

How to opt out

You can choose to opt out at any time by completing an opt out form. You might be able to apply for a refund of the contribution you’ve paid.

If you opt out of the scheme, your employer will stop deducting pension contributions from your salary and advise SPPA that you are no longer an active member of the scheme. If you do leave the scheme, you won’t accumulate any pension benefits during any period where you’re not an actively contributing member.

Opting out within three months

If you leave or opt out within three months of being enrolled into the scheme, your employer will automatically refund any contributions that you have made, less a deduction for tax.

Opting out between three months and two years

If you leave or opt out between three months and two years you can:

  • apply for a refund of contributions (which will be paid less certain deductions)
  • transfer your benefits to another public service pension scheme
  • defer taking a refund until you’ve decided on your future intentions (for example, returning to the NHS at a future date or re-joining the scheme within 5 years).

If you don’t apply for a refund of contributions and you don’t return to pensionable employment within 5 years, SPPA will contact you to organise the payment of your refund.

Get a refund of your contributions


Practitioner opting out 

What happens when you leave the scheme?

Your NHS pension scheme practitioner membership must cover ALL your practitioner employments at all times.

Opting out

Due to differences in the regulations for practitioners, you must complete the practitioner opt out form, declare each of your Practitioner employments on the form and send it directly to SPPA. We’ll then contact your individual employers directly and inform them that you wish to opt out of the scheme.

The opting out process takes longer for practitioner members, so you’ll need to give two months’ notice in advance of the date you wish your contributions to stop, this must be the last working day of the month. You must leave scheme membership on all of your practitioner posts at the same time, However, if you have an ‘NHS officer’ employment, you can still pay pension contributions on this post.

Once your employer has received notification from SPPA that you wish to opt out then SPPA will receive a leaver form (NSR02), from your employer and return it to the SPPA. You’ll then have the following options, depending on how long you’ve been a member of the scheme:

Less than two years’ service: 

  • option to apply for a refund of contributions
  • option to preserve your benefits in the scheme
  • option to transfer your benefits to another defined benefit scheme.

More than two years’ service:
  • option to preserve your benefits in the scheme
  • option to transfer your benefits to another defined benefit scheme.

What are the consequences of opting out?

If you opt out and take a full refund of contributions, you’ll have no benefits left in the scheme.

If your benefits are preserved in the scheme, your:
  • Death in service benefits may be reduced;
  • Ill health retirement benefits may be reduced, and;
  • Your annual Pensions Increase will be linked to the Consumer Price Index (CPI) rather than CPI + an enhancement.
Additional Pension and Added Years contracts

If you leave the scheme while you’re still committed to paying monthly contributions towards Added Years or Additional Pension contracts, you’ll not receive the full entitlement from your contract. If you opt out of the scheme for longer than a 12-month period, your Added Years or Additional Pension contract will be cancelled you’ll receive a proportional credit of what you’ve already purchased.
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