Is Opting Out of the Police Pension Worth It?
Opting out of the police pension lifts your take-home now, but for almost everyone the maths strongly favours staying in. You give up a 35.3% employer contribution, tax relief and a guaranteed income for life. Here is the full picture.
The short answer
For almost every serving officer, opting out of the PPS 2015 pension is a poor financial decision. Your own contribution of 12.88% to 14.22% of pensionable pay feels steep on the payslip, but it is only part of the money going into your pension.
Your force contributes 35.3% of your pensionable pay on top, and you receive income tax relief on your own share. Opting out keeps a little more cash now and throws away far more in deferred pay and guaranteed retirement income.
Put simply, for most officers the pension is one of the most valuable parts of the whole package. The sections below show the numbers so you can judge it for yourself, and link to the calculators that let you model your own position.
What does opting out save you now?
Your take-home goes up by your contribution, less the tax relief you would have received. Because the contribution is taken before tax, the real cost to you is lower than the headline percentage.
| Pensionable pay | Contribution rate |
|---|---|
| Up to £37,035 | 12.88% |
| £37,036 to £79,588 | 13.88% |
| £79,589 and above | 14.22% |
A constable on £40,000 pensionable pay contributes about £5,552 a year. With 20% tax relief, the real cost to take-home is roughly £4,442 a year, or about £370 a month. The take-home pay calculator shows your own pay with the pension switched on and off, so you can see the exact difference.
Higher-rate taxpayers get even more relief, at 40%, which makes staying in cheaper still for sergeants and above. Because the relief is automatic through the net pay arrangement, you do not need to claim it. This is part of why the take-home saving from opting out is always smaller than the headline contribution rate suggests.
What you give up
The employer contribution is the part most officers overlook. On that same £40,000, your force adds about £14,120 a year into the scheme that backs your benefits. Opt out and that money is simply gone, because it is only paid for scheme members.
You also give up the benefits that come with membership:
- A guaranteed, inflation-protected income for life, built at 1/55.3 of pensionable pay each year.
- Ill-health retirement cover if you can no longer serve.
- Death-in-service benefits and a survivor's pension for your family.
Replicating a defined-benefit pension like this in a private plan is close to impossible. You would have to fund both your own and the employer's share, and buy guarantees that private pensions rarely offer. See how your own pension builds with the police pension calculator.
It helps to see the pension as deferred pay rather than a deduction. The money you contribute, plus the far larger employer share, is buying a guaranteed income you will draw for the whole of your retirement, often for 20 years or more. Few other benefits in policing are worth as much over a career.
The real cost in numbers
Each year in the scheme on £40,000 builds about £723 of annual pension, payable for life and revalued each year. Over a full career those slices add up to a pension worth a large share of your final salary.
Weigh that against what opting out saves. You keep roughly £370 a month now, but you forgo the employer's £14,120 a year and the pension it funds. For the vast majority of officers, that trade is heavily one-sided in favour of staying in.
How does it compare to a private pension?
To match the police scheme privately, you would need to pay in not just your own contribution but the employer's 35.3% as well, and still find a way to buy the guarantees that come free with the police pension.
A private defined-contribution pension rises and falls with investment markets and gives no promise of a set income. The police scheme pays a defined, inflation-protected income for life regardless of markets. On a like-for-like basis, replacing it would cost far more than you would ever save by opting out.
What happens to the pension you have already built?
Opting out does not erase the pension you have already earned. The benefits you built while a member are preserved and become deferred, revalued over time until you draw them.
You simply stop adding new pension from the date you opt out, and you stop receiving the employer contribution. If you opt back in later, you start building again, but the years you were out are years of employer money you will never get back.
When might opting out make sense?
In fairness, there are narrow situations where officers consider it, and it is worth knowing them.
A small number of very high earners can face annual allowance tax charges, where the growth in their pension exceeds the yearly limit. For them, the picture is more complex and depends on personal tax circumstances. The lifetime allowance, once a common reason to opt out, was abolished in April 2024, so it is no longer a factor.
Some officers also consider opting out temporarily during severe short-term financial pressure, such as clearing high-interest debt. Even then, the loss of the employer contribution usually outweighs the saving, and there are often better options. If any of this applies to you, take regulated financial advice first. This article is general information, not financial advice.
If cash flow is the real problem, speak to your force pensions team and consider free, impartial guidance from MoneyHelper before making a permanent decision. Opting out to solve a short-term squeeze can cost tens of thousands of pounds in lost employer contributions over a career.
Can you opt back in later?
Yes. If you opt out, you can rejoin the scheme later, and your force will also automatically re-enrol you roughly every three years under pensions law. The police scheme does not offer a reduced 50:50 contribution option, so the choice is in or out.
Before you do anything, check the official scheme information through your force pensions team or the Police Federation, and model the take-home effect yourself first.