Changes to contracted out
pensions from 2012

The rules for contracting out of the additional State Pension will change in 2012. The changes mean that contracting out will not be possible through:

  • – a money-purchase (defined-contribution) occupational pension scheme
  • – a personal pension or a stakeholder pension

If you are contracted out through one of these schemes on 6 April 2012, you will automatically be brought back into the additional State Pension. You will begin to build up additional State Pension from this time. Download ‘Abolition of contracting out on a defined contribution basis to find out more.&lrquo;

If you are already contracted out

If you are already contracted out through either type of scheme, you will:

  • – be able to continue to make your own contributions to the scheme
  • – be able to continue to benefit from any employer contributions to the scheme
  • – no longer be able to benefit from any rebate of National Insurance contributions

Contracting out through an occupational salary-related (defined-benefit) scheme will still be allowed. However, contracting out for these schemes will be reviewed in the future.