Take-home pay guide · 2026/27

Should I opt out of my workplace pension to increase take-home pay?

Opting out can increase your take-home pay. Compare the cash you would gain each payday with the total that would stop going into your pension, including your employer’s contribution. The difference depends on how your scheme handles tax relief and whether you use salary sacrifice.

Worked example on a £100 monthly contribution

Suppose you contribute £100 a month through a net pay arrangement and your employer adds £60. If the full £100 reduces income that would otherwise be taxed at 20%, stopping contributions increases take-home pay by about £80 a month, while £160 a month stops going into your pension.

If your scheme uses net pay or salary sacrifice, use the take-home pay calculator to compare your current contribution with 0%. Enter your contribution as a percentage of full gross salary. For relief at source, ask payroll or your pension provider for a comparison.

What happens after opting out?

If you were automatically enrolled and opt out within the one-month opt-out window, you normally get back contributions you already paid. If you leave later, the scheme rules determine how contributions are treated. Your employer will generally re-enrol you around every three years if you are eligible.

Ask payroll what your next payslip would show, how much your employer would stop contributing and whether your scheme allows a lower contribution.

Official guidance · GOV.UK on leaving a workplace pension scheme