Should I Opt Out of the
Police Pension?
A clear, balanced explanation of what opting out means, what you lose, what you keep, and when it might — or might not — make financial sense.
Independent explanation of police pension regulations. Not regulated financial advice. Not affiliated with any police force or pension administrator.
The police pension is a defined benefit scheme.
Opting out means:
In most long-term scenarios, remaining in the scheme provides greater financial security.
However, short-term financial pressure may lead some officers to consider opting out. The decision must be understood fully before taken.
Why Officers
Consider Opting Out
Common reasons include:
These concerns are understandable.
What You Actually Lose
If you opt out:
The Benefit Gap
Employer contributions in police schemes are substantial — often over 30% of salary equivalent.
This is not matched elsewhere.
Short-Term Relief
vs Long-Term Cost
Opting out increases monthly take-home pay immediately.
It removes guaranteed retirement income growth.
Over a 25–30 year career, this difference compounds significantly. This is not about “free money.” It is about losing defined benefit accrual.
Can You Opt Back In?
Yes.
Police officers can opt back in.
However:
You cannot reclaim lost accrual during opt-out period unless buying added pension or through other limited mechanisms.
Refunds and Short Service
Eligibility for contribution returns.
Less than 2 years’ service
Outcome
You may receive a refund of contributions (minus tax).
After 2 years
Outcome
Benefits are preserved.
Refund rules depend on scheme and timing.
Opt-Out Impact Calculator
Guaranteed income lost for EVERY year opted out.
Annual employer contribution you effectively "delete".
By opting out for 20 years, you are choosing to walk away from a guaranteed, inflation-linked pension of £16,275 per year for life.
Disclaimer: Illustrative purposes only. Based on average 2015 CARE scheme rules. Does not account for inflation, salary growth, or tax relief impacts. Not financial advice.
Defined Benefit
vs Private Saving
Police Pension
Private ISA or SIPP
Replacing defined benefit pension privately requires significant investment discipline and risk tolerance.
When Might Opting Out Make Sense?
Exploring potential (but rare) scenarios neutrally.
Possible scenarios:
However:
These are individual cases. The default position for long-term financial security is remaining in the scheme.
Financial Pressure
Self-Assessment
Check the boxes that apply to your current situation to see a diagnostic analysis of the pension trade-offs.
Financial decisions of this magnitude require professional guidance. Contact a regulated advisor or the Federation branch for support.
Psychological Trap:
“I’ll Invest It Myself”
Many assume:
They will invest the extra take-home pay.
In reality:
Most spending patterns absorb the difference.
Opting out rarely results in disciplined equivalent saving. This behavioural risk is significant.
Tax and Lifetime
Allowance Context
Pension contributions:
Opting out may increase tax liability on gross income.
The pension remains one of the most tax-efficient retirement vehicles available.
Detailed FAQ
Should I opt out of the police pension?
In most long-term cases, remaining in the scheme provides greater financial security due to guaranteed income and high employer contributions.
What happens if I opt out of the police pension?
You stop building pension benefits and lose employer contributions. You may opt back in, but lost accrual is not automatically restored.
Can I get my police pension contributions back?
If you leave with less than two years’ service, you may qualify for a refund, subject to tax.
Is the police pension worth it?
For most officers serving long-term, the defined benefit structure makes it one of the strongest pension schemes available in UK employment.
Does opting out increase take-home pay?
Yes, immediately — but at the cost of long-term retirement income.
Model Your Exact Pension
Use our Police Pension Calculator to estimate your annual income under the 1987, 2006 or 2015 scheme — including early retirement reductions and McCloud impact.
Decision Over
Administration
Opting out is not a trivial administrative decision. It is a structural financial choice.
The police pension is rare in modern employment — a guaranteed, inflation-linked defined benefit scheme. Short-term relief must be weighed against long-term income security.
Understanding the mechanics prevents regret.