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Reasons to turn down free money

Updated 23 November 2022

3min read

Nick Green
Financial Journalist

The government introduced automatic enrolment in workplace pensions to ensure that everyone in employment gets a chance to save for retirement. But here are some of the reasons why you might still say no to a workplace pension.


You misheard the question

No, the boss wasn’t asking if you wanted tomato in your roll. She was asking if you wanted to auto-enrol.

You take unnatural pleasure in filling in forms

In order to opt-out of your workplace pension scheme, you’ll need to request, complete and return a form making your wishes clear. It’s possible that you love forms so much that you simply won’t be able to resist this, no matter how much it costs you.

You have to say ‘no’ to everything for a year after losing a bet

A few quiet nights in wouldn’t hurt.

You want more money to spend now

At last, a sensible reason. Or is it? Certainly, by not making any pension contributions now, you’ll have a bit more take-home pay. However, it won’t be nearly as much as you’re losing out on by not being in the pension scheme. You’ll be missing out both on tax relief and on what your employer would pay in. If you like to have money to spend now, then presumably you’d like to have money to spend in retirement too (but at this rate, you won’t).

Your employer has put pressure on you to opt out

Oh dear. This is illegal. If your employer encourages you in any way to opt out of auto-enrolment, or even asks you to, they are breaking the law. You should report them to The Pensions Regulator.

You already have a personal pension

If you were previously self-employed, for example, you might already have a personal pension and see no reason to change it. But this still isn’t a very good reason, because what you don’t get with a personal pension are any employer contributions. So you're missing out on another load of free money.

You’re fabulously wealthy

It’s possible you’ve won the lottery or inherited the family pile. But seeing as it takes more effort to opt out than it does to stay enrolled, it’s hard to see why you’d want to do this. After all, you can always give the extra cash to a good cause.

FINALLY – a genuinely good reason to say ‘No!’

If your accumulated pension savings to date may be close to the Lifetime Allowance  then you could be hit by an unexpected (and large) tax bill if they end up exceeding this allowance. This can happen particularly if you start a new job and are enrolled automatically in the pension scheme. Therefore, if you are on a relatively high income (though you don’t need to be super-rich to be affected) then you should definitely seek financial advice on whether or not to opt out.

According to Nest (the government’s auto-enrolment pension scheme) the half a million workers who opted out first time around have missed out on a collective £205 million of free money already – that’s in addition to the money they would have paid in themselves. The average worker who started a workplace pension two years ago would now have around £670 in their fund. And yet, 10 per cent of eligible workers are still choosing to opt out. So we can only assume they had one of the ridiculous reasons above. The mind boggles.

To find out more about how great pensions are, visit our pension pages or have a chat with a financial adviser.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.