How Much Is State Pension If You Were Contracted Out? – What You Need to Know in the UK

If you’ve ever asked “How much Is State Pension if You were contracted out?”—you’re not alone.

Many people in the UK are discovering that their pension forecast is lower than expected, often due to something they signed up for decades ago without fully realising it: contracting out.

Whether you opted out of SERPS in the 1980s or were automatically contracted out through your employer’s scheme, this guide is here to explain exactly how it affects your State Pension today—and what you can still do about it.

What Does It Mean to Be ‘Contracted Out’ of the State Pension?

What happened to your money when you contracted out of SERPS?

If you were contracted out of SERPS (State Earnings-Related Pension Scheme), part of your National Insurance (NI) contributions was redirected from the government to a private or workplace pension scheme.

The idea was that your private scheme would replace the additional State Pension you gave up.

Why was contracting out introduced—and when?

Contracting out was introduced in the late 1970s, but it really took off in the 1980s and 1990s. Many people opted out of SERPS in the 1980s, often through financial advice or automatically via public sector employment, like the NHS.

Are NHS workers contracted out of State Pension?

Yes—until 2016, most NHS workers were part of contracted-out schemes. That means they paid lower NI contributions in exchange for building pension rights through the NHS pension, instead of SERPS or the State Second Pension.

Contracted in vs contracted out: What’s the difference?

• Contracted in: You paid full NI and built up both basic and additional State Pension (like SERPS or S2P).
  
• Contracted out: You paid less NI but lost entitlement to the additional State Pension, relying on your private scheme instead.
  

The Impact of Contracting Out on Your State Pension

How does it affect your National Insurance record?

Being contracted out meant paying lower NI contributions, so even if you’ve worked for 35 years, your record may not reflect that in full. This often leads to confusion when checking your State Pension forecast.

Will my State Pension be reduced if I have a private pension?

Not directly. It’s not your private pension that causes the reduction—it’s the fact that you were contracted out. The government assumes your private pension replaces part of what you would’ve got from SERPS.

Will I get full State Pension if I contracted out of SERPS?

In most cases, no. If you were contracted out for a significant period, you probably won’t qualify for the full amount of the new State Pension. But it’s not permanent—there are ways to boost your State Pension (more on that soon).

How does COPE (Contracted Out Pension Equivalent) work?

Your pension forecast may show a COPE figure—this is an estimate of what your private pension should pay to replace the additional State Pension you gave up.

However, this amount isn’t deducted from your State Pension directly. It’s just there to explain why your State Pension is lower.

How Much Is Your State Pension If You Were Contracted Out?

Example scenarios for calculating your pension

• If you were contracted out for 20 years, your starting amount under the new system could be £140–£160/week, instead of the full £221.20/week (as of 2025).
  
• Someone contracted in for the same time may receive the full amount, depending on NI contributions.
  

Average compensation for opting out of SERPS

There isn’t a standard compensation for opting out, but some people were mis-sold SERPS alternatives.

If you believe you were misled, you may be able to file a complaint or claim compensation through the Financial Ombudsman or the FSCS.

Does a COPE deduction reduce your State Pension forever?

No. The COPE figure doesn’t reduce your actual payments—it simply explains why they’re lower than the maximum. Your State Pension can still increase over time through inflation or deferral.

How to Check Your Pension and Find Missing Details?

How do I find my contracted out pension?

To track your private or workplace pension that replaced SERPS:

• Visit the Pension Tracing Service
  
• Contact former employers for scheme details
  
• Check your payslips or old pension statements
  

Where to check your State Pension forecast and COPE value?

Check your State Pension forecast and COPE amount using this service:

• Check your State Pension
  
• To access the service, you’ll need your Government Gateway credentials or your National Insurance number.

Viewing your NI record and contribution gaps

To see how many qualifying years you have:

• Visit View your National Insurance record
  
• Look for any missing years, especially if you worked part-time, were self-employed, or contracted out.
  

Can You Increase Your State Pension After Being Contracted Out?

Can I increase my State Pension if I was contracted out?

Yes—Even if you were contracted out for years, there are still ways to increase your State Pension.

Paying voluntary National Insurance to fill gaps

If you have lower than 35 qualifying years, then you can:

• Purchase Class 3 NI contributions for up to 6 previous years
  
• Each additional year could add £5.29 per week to your pension
  

Deferring your pension to get more

If you delay claiming your State Pension:

• You’ll earn about 5.8% extra per year deferred
  
• Great option if you’re still working or don’t need the pension immediately
  

Supplementing with a workplace or private pension

Remember, your private pension from when you were contracted out is still part of your retirement income. Combine that with your State Pension to estimate your full income picture.

Table: State Pension Outcomes Based on Contracting Out History

Contracting Out Status	Potential Pension Impact	What You Can Do
Opted out of SERPS (1980s–2016)	Likely reduced starting amount	Check COPE & consider NI top-ups
Never contracted out	May receive full State Pension	Maintain NI contributions
Mixed employment history	Varies based on NI & COPE	Use GOV.UK forecast tools

Conclusion: Knowing the Impact of Contracting Out Helps You Plan Better

Your State Pension is one of the most important parts of your retirement—but if you were contracted out of SERPS, you might receive less than expected.

Understanding what happened to your contributions, how COPE works, and how to boost your pension puts you in control.

Don’t panic—many people are in the same boat. Start by checking your forecast, tracking down any private pensions you’re owed, and looking at whether voluntary NI contributions are worth making. It’s your future—you deserve clarity.

Frequently Asked Questions On How Much Is State Pension If You Were Contracted Out

1. Why is my pension lower than others my age?

You may have been contracted out, meaning you paid less NI and now receive less State Pension.

2. Did my employer benefit from my contracting out?

Yes, in many cases employers paid lower NI too, and in return, provided a pension scheme expected to replace the State one.

3. What if I wasn’t told I was contracted out?

Sadly, that happened often. If you believe you were mis-sold a pension, contact the Financial Services Compensation Scheme (FSCS) or seek independent financial advice.