If you are an employee, and earning above a certain level on which you’ve paid National Insurance contributions, you are automatically included in the State Second Pension unless you decide to leave it (called contracting out). If you are contributing to your employer’s occupational pension scheme, it may be a contracted-out scheme – check your scheme to find out.

If you decide to contract out:

You give up your State Second Pension entitlement and build up a replacement in your own pension fund instead – for example, a stakeholder or personal pension.

HM Revenue and Customs will pay a rebate of part of your National Insurance contributions into your stakeholder or personal pension.

You will continue to be contracted out of the State Second Pension unless you decide to contract back in. You can review your decision whenever you want to.