Can I get my pension contributions back?

Do you have regrets about the pension scheme you have signed up for? Perhaps money is tight, and you require some quick funds? There are various reasons why you might be looking into getting your pension contributions back. Yet is it possible?

Can I get my pension contributions back?

If you’re wondering if it’s possible to gain your pension contributions back, the answer of “maybe” is not exactly the most reassuring. However, there are only certain cases where it is possible to claim back contributions you’ve made to your pension scheme early.

In most situations, you have to wait until you have reached the defined pension access age. The current access age is 55. However, from 2028, that is scheduled to go up a couple of years to 57.

While most people will need to reach either of these ages in the future before they can get their pension contributions back, there are specific cases where a more premature resolution is available.

Is my pension type the key to getting a refund?

The pension type you have will play a key role in whether a refund is viable or not. With a salary sacrifice workplace pension, for example, it isn’t possible to make a claim for any of your contributions. The reason: these are not classed as personal contributions, but rather as employer contributions.

With other personal or workplace pension types, there is the potential to get your contributions back early. This can be dependent on the amount of time you have been contributing financially to your selected scheme.

What is the time period for a pension contribution refund?

Time is one of the main elements of getting your pension contributions back. If you don’t want to wait until you reach the pension access age, there are generally two options available.

Firstly, if you have an instant regret about the pension scheme you joined, you will often be able to get a refund if you request it within 30 days of joining. Some pension options will even extend this up to the two-year mark.

Are there other circumstances to get pension contributions early?

Aside from an employer-related pension, you could have a private or personal pension. With either of these, there will be a 30-day cooling-off period automatically applied under your chosen scheme. Certain pension schemes will also give you the option to cancel your plan at any time and receive a refund. However, refunds won’t include any applied tax relief contributions.

Have you made personal pension contributions that exceed your relevant earnings? While this is unlikely, there are cases where you can gain a refund for the excess, achieved through the “refund of excess contributions lump sum” process.

Another extreme circumstance is if you were to suffer from a terminal illness. In this case, it might be possible to retire and claim your pension early.

What are the drawbacks of getting your pension contributions back?

You may have some clear reasons for looking to get your pension contributions early. However, there are some notable drawbacks if you decide to get your pension contributions back early.

Perhaps the biggest is that if you receive a refund on your workplace pension contributions, you will lose your employer’s contributions. The only way to get employer contributions is if you were to leave their pension scheme entirely.

Another issue is that once you request a refund, the period from this won’t result in any pension savings. This means your pension pot will suffer – and you will have less money to live on once retired. Additionally, one of the biggest benefits of pension contributions is tax relief, but this is lost with refunds.

You might also like:

Pension contributions explained

How much can I pay into a pension each year?

Disclaimer 

The content of this article is for general information purposes only and should not be construed as legal, financial or taxation advice. You should not rely on the information contained in this article as legal, financial or taxation advice. The content of this article is based on information currently available to us, and the current laws in force in the UK. The content does not take account of individual circumstances and may not reflect recent changes in the law since the date it was created. It is essential that detailed financial and tax advice should be sought in both jurisdictions and any legal advice, if required.

This notice cannot disclose all the risks associated with the products we make available to you. When making your own investment decisions it is important you understand that all investments can fall as well as rise in value and it is possible you may get back less than what you have paid in. You should also be satisfied that any investments you choose are suitable for you in the light of your circumstances and financial position. You should seek financial advice if you are not sure of what’s best for your situation.