Should I opt out of my pension

[Stillto]

I'm living hand to mouth at the moment. Literally ran out of money last month and had to make £20 last a week. I've always paid into a pension (NHS) but now i'm thinking that I should opt out for a year and clear down some debts. What happens if I opt out? Do I lose all the money i've paid in?

No.

Do you have anything you can sell in the way of clothes/stuff you don't use etc?

Sorry you're struggling.

No, you will always find a reason not to opt in again if you do this. can you do any paid overtime?

Generally opting out of your pension should always be a last resort since you gain far more than you pay in.
Can you sell things, adjust your lifestyle to get rid of the debt? Change your shopping habits, get rid of any subscriptions, move to payg phone etc.
I don't know how an nhs pension works but your existing years/ monies should be unaffected. Can you reduce your pension payments by half and find the other half through really economising? I'd talk to HR.

I would make a list of everything you spend money on and see what else you can cut out first. There are lots of things you could cut down on or find ways to make money by selling stuff as others have suggested.

How old are you? Do you have time to make the payments up?

I’m not adverse to suspending pension payments especially if you are really struggling to actually live at the moment, but I’d certainly see if I had an alternative first.

Agree with everyone else.
It would be very much a short term gain for a long term loss of considerably more. If you can possibly avoid it, you should try.

What other options have you looked at, both in terms of increasing income or reducing outgoings ?

Everything which can reasonably be sold has been sold. It's got to the point now where I am terrified of the washing machine or car packing up as I wouldn't be able to replace them.

I've swapped from Tesco to Aldi
I can't work overtime, single mother, 4 teens/children at home and i'm out of the house at 7:15 and I don't get home until 6:30. Poor DD is in childcare from 7:30-6:15 everyday as it is.

I have around 7k debt which is about 350 a month repayments. If I could cut those repayments I could make it work until some of it is paid off but that relies on nothing breaking or needing buying in the meantime as there is no spare money or cushion.

Happy to hear all suggestions!

No because what will change to make you opt back in?

Would it help to seek advice from StepChange or other debt advice charity? They nay be able to help you negotiate a much lower monthly repayment.

Also are you sure you are getting all your benefit entitlements?

Your life does sound very hard, OP.

Not if you can at all help it. Have you done a statement of affairs? Have a look on money saving expert - they’ll point you in the right direction.

Nope for the love of god don’t opt out of such a good pension scheme.

Go to CAB and get them to help you freeze your interest and negotiate more reasonable payments for your debts.

No dont!

NHS pension scheme is really generous so if you opt out you'll miss out on the extra value on top of your own contributions. You won't lose the money you've put in already though.
Opting out is really a last resort.

Please get some advice regarding your debt, just to give you some breathing space. Also check you're claiming everything you're entitled to - child maintenance if possible, free school meals, council tax discount etc.

Can the teens look after youngest after school to save on childcare? Even if you 'pay' them, money stays in the family?

dont opt out.
how old are the teens? any chance of them picking up weekend jobs or something to start paying for some of their own items?

Have you been to one of the debt charities, such as StepChange? They could well come up with new strategies to help you reduce your total debt.
How did you acquire that level of debt? I don't need to know the answer, but have you stopped whatever action that was? Have a look on MSE for budgeting help.

Opting out of your NHS pension should be a very last resort, as they are usually very advantageous. The problem is, when you opt back in, the terms are rarely as beneficial.
Don't take any action on opting out until you've got a clear idea of the pros and cons from Finance dept or HR.

@JoshLymanIsHotterThanSam

Nope for the love of god don’t opt out of such a good pension scheme.

Go to CAB and get them to help you freeze your interest and negotiate more reasonable payments for your debts.

This.

Repayments of £350/month seems a lot for a debt of 7K - try and negotiate this.

As others have advised, don't opt out of the pension if you can possibly avoid because it will never seem the right time to re-join.

Jesus, you will be working until you are 68! Opt out and clear your debts then opt back in once teens have gone and you can buy additional years. No point being stony broke now for a retirement that , for some of us, womt even come!

I agree about the possibility of the teenagers getting jobs, dog walking/sitting, garden services??

PP have lots of good suggestions to avoid opting out.

Check carefully what death in service benefits you would miss out on if you do opt out - unless you have good life insurance in place these are very valuable by themselves, in addition to the generous pension benefits.

Look at your ESR to see the true value of your pension contributions. It's not only the money you pay in, it's also the employers contributions you would be sacrificing.

Please don't stop contributing to your pension if there is any way of avoiding it. I have colleagues who didn't join because it was too expensive and 10 years later still haven't.

As PP mentioned if you are a lone parent, the life and illness cover that comes with your pension is really important to consider too.

If you have separate life insurance, I'd cancel that before stopping pension contributions.

Your NHS pension gives you other benefits such as death in service so think carefully if you pull out.

Never opt out of your pension!

Have you looked into an IVA?

@Stillto I agree with several previous posters, the NHS scheme is excellent value for you. Although your contribution is fixed and can’t be reduced the employers contribution is also fixed. There is also a death in service benefit please nominate who you would like this to go to ie make sure it is not your ex named!

Seems like contacting one of the well respected bodies such as step change or Christians against poverty to try and reduce debt payments is a great option for you. It might also be worth looking at the debt advice section on money saving expert in case there is something you have missed in looking at your finances. Single adult council tax reduction, child benefit for all four children in your name, any entitlement to benefit top ups?? As a fellow NHS worker and the stresses of the last eighteen months the last thing you need is worry about finances too. Can union/RCN offer any financial aid?

As pp have said, one of the charities who help people restructure their repayments are your best bet. Don't risk your pension. I know it seems like you're short of options now but there will be even fewer as you get older.

Also, join something like Next Door for your area and then if things like the washing machine do pack up, you can always look out for or ask if anyone is replacing theirs so would let you have the old one.

Do you know the £10 a day threads on here? Doing surveys and that sort of thing might get you a bit of extra cash that would make a difference. You could set the teens to work filling them in!