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Leaving your pension scheme

Taking a refund

If you leave your pension scheme within two years of joining, you may be able to take a refund of your contributions.

If you leave your pension scheme, you do not lose the benefits you have built up. They continue to belong to you and you have several options for what to do with them. Your scheme administrator or pension provider should tell you which options apply to you.

If you leave your defined benefit or money purchase pension scheme having been a member for less than two years, you may be able to take a refund of the contributions that you’ve paid, if the scheme’s rules permit this.

As of 1 October 2015, members of occupational defined contribution pension schemes will no longer be entitled to short-service refunds if they leave employment (or opt out) with less than two years qualifying service. 

The change only applies to individuals who became members of an occupational pension scheme on or after 1 October 2015, or who re-joined an arrangement having already taken a refund or transferred out.

Those with less than 30 days service will still be able to request a short service refund of just their contributions.

If you have made any contributions using a salary sacrifice arrangement, these cannot be refunded as they are classed as employer contributions and must remain in your pension pot.

If you have been a member of a personal pension or stakeholder pension scheme, you only have the option of taking a refund if you’ve been a member for less than thirty days, and you haven’t made any contributions using a salary sacrifice arrangement.

In each case, the amount that you receive will have been subject to tax to take account of any tax relief you received when you paid contributions.

Contributions refunded from a defined benefit or money purchase pension scheme are taxed at 20% on the first £20,000 and at 50% on the remainder.

The amount you receive back from a personal pension or stakeholder pension scheme is the contributions that you paid net of basic rate income tax relief.

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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