What did 'opting out' or 'contracting out' of S2P or SERPS mean?

'Opting out' or 'contracting out' are aspects of the State Pension system that no longer exist but they may have affected any entitlement to additional State Pension you could have built up before 6 April 2016. If your employer provides an occupational pension scheme, in the past it would have been either 'contracted out' or 'contracted in'.

In a contracted-out pension, the member and employer would pay lower National Insurance contributions and, during that period, the member would not have built up additional State Pension entitlement. If you were contracted out, your new State Pension may be lower as a result, but if your scheme was 'contracted in', your State Pension entitlement may be higher. You can check your pension entitlement on the GOV.UK web site.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.