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?

Could you reduce your contributions rather than opting out completely?

Could you move your debt onto a 0% credit card to reduce interest payments? Even if only a chunk, could make a good difference.

@itisthecause

No don't opt out.

The NHS pension is massively valuable and whilst I can totally understand your contributions being very much needed you would be losing 14% of employers contributions by opting out.

22%

NHS pension death in service is 2x salary.

I have a 3 bed house, 3 girls in one room, boy in another and me in the other, no chance of downsizing!

So with 4 teens, oldest 16, do you NEED to pay for childcare?

Different era, but I was a "the key is in the garage" kid by the time I was 9 or 10.

Maybe there isn't free/cheap extra curricular stuff available, but it is worth checking what the schools offer.

Can I ask what would your children do if you were to die? Part of your pension includes a death in service payment and any pension accrued at the time of death can be paid out to your dependants until they leave full time education. Just one reason why you shouldn’t opt out, especially if you don’t already have life insurance for the same value!

No, plus pension contributions bring tax relief, so your tax would increase if you opt out of your pension, so you won’t be as better off as you think.

Get over to moneysavingexpert and post an SOA for advice.

I think you might be better off on UC, I know there are downsides but people in work are quite often better off- doesn't mean the website is wrong. You could do 'entitled 2' calculation to compare/check?

Teens cannot get to the school in time to collect. They can’t take her to school either as they have to her buses to their schools. She’s still too young for a key, she’s only 6.

Absolutely not. It's such a valuable benefit.

Are your debts high interest? Credit cards or loans? Could you approach them individual to get any interest frozen and agree a payment plan?

Have a look here
www.rcn.org.uk/get-help/member-support-services/lamplight/signposts-for-funding

I’m so sorry you’re struggling, but things will get better. Please contact them all.

Don't opt out. You are unlikely to see any real benefit financially as tax and NI contributions will be adjusted so you wouldn't actually have your normal pension contribution back as a full amount

The NHS has a generous death in service benefit, dependants' pension and sick pay so are you sure you need that private cover?
www.wesleyan.co.uk/pensions-and-retirement/nhs-pension/when-i-die

[quote time4anothername]The NHS has a generous death in service benefit, dependants' pension and sick pay so are you sure you need that private cover?
www.wesleyan.co.uk/pensions-and-retirement/nhs-pension/when-i-die[/quote]
Disagree that it’s generous, both my and my late DH’s companies offer 4 x salary death in service lump sum plus similar or better pension arrangements. We had some life insurance as well as what DH’s company offered and it’s been invaluable. I’d keep the private insurance if at all possible, especially as OP has twice the number of kids I’ve got.

op. Agree with others re debt management and so hope things get easier for you and soon.

OP I've been a pensions advisor for over 30 years. Never opt out of a pension if there is any way to avoid it and especially not if you are in something as gold plated as the NHS scheme. What you save month by moth will in no way compensate for the benefits you will lose.

@tunnocks In this day and age 4x life cover from a company scheme is exceptional unless you are senior management.

[quote DerAlteMann]**@tunnocks In this day and age 4x life cover from a company scheme is exceptional unless you are senior management.[/quote]
I knew it was good but nothing to compare it with as both been at same companies forever. You’d know much more than me! Both middle management. Hopefully it’s obvious I wouldn’t suggest OP ditch the pension and just keep the private life insurance; for me the latter has been a very useful extra as kids so young when DH died.

As someone who had to trash their credit score in order to sort out a spiralling debt problem I can assure you it doesn’t take long to build it back up to a point where you can be offered credit for things like a car.

Have a look at Dave Ramsey’s YouTube videos, the baby steps are in line with what you are asking and work fir a lot of people:

www.mumsnet.com/Talk/legal_money_matters/3902206-any-dave-ramsay-money-makeover-fans-here

Go onto the universal credit essentials page online. It shows you how to work out how much you'll get. If you aren't getting hb at the moment then the extra £500 could well be right as there is a housing element included

And yes dave Ramsey is awesome

I think because of the rent allowance element you’ll be much better off on UC. But I’m not an expert.

There ARE expert benefits advisors on MN though - start a new thread with a title like - ‘Can anyone check my universal credit calculation?’ and get some advice.

OP - sounds counterintuitive, but have you played around with sums for dropping hours at work? If you dropped a couple of hours from each work day, you may find that your benefits will be topped up and your childcare bill goes down.

Does the 16yo help with childcare in the school holidays?

@Iamaslummymummy

And yes dave Ramsey is awesome

Some of his advice is but he is a raving Trump supporter!