Opting out of NHS pension for 1 year

[PensionShmension]

i have been qualified as a nurse since September 2021. I work as a band 5 nurse, I work in clinics 9-5 so no enhancements. I LOVE my job but there was no overtime opportunities plus I am a single parent so would struggle to find childcare.

Anyway, this year I have quite a lot to pay for. My car is on its way out (it’s 9 years old), it’s SCRAPED through the Mot with loads of advisories. It truly is on its last legs, cutting out, needs loads of work doing to it etc. I live in fear it just won’t work one day. I work in a community job so need a car. I have no savings after putting myself through uni, I don’t struggle day to day don’t get me wrong I live fine but definitely only have a few pence left in my account by payday. With the cost of living etc my wages aren’t going as far, DS is getting bigger and is needing new clothes all the time (get most of them off Vinted!). Just life it a lot more expensive (as it is for everyone).

my priority is getting a new car (well, new to me). I’ve done the figures and basically there’s no way I can afford a car on finance on my current wage, i budget strictly and there’s no leeway. I move up slightly on the pay scale come September. I have been thinking of opting out of my pension for 1 year (I have been in it for just over 1 year). This would allow me the extra funds to pay for the finance on the car. It would only be for 1 year. In feb next year some I will be receiving some money (not a life changing amount, approx £4,000) so enough to cover the car payments and I will rejoin the pension. I am not stupid, I know what a good pension it is but right now I feel like I can’t get on any kind of even keel. I am not on the breadline in anyway, we have enough for food and for heating and have a secure roof over our heads but I don’t smoke, don’t have any subscriptions (that I pay for anyway, thanks mum 😂), no foreign holidays etc. I can afford to have my hair done every 8 weeks, ds has an extra curricular so like I say, we aren’t dirt poor but cutting out my £40 hair cut that I have 6 times a year isn’t going to help pay for a new car!

wow this is long. So yeah, I know it is last resort but right now I think it might be the right choice? I don’t claim any benefits (not entitled), exdp pays £150 maintenance so my monthly income is approx £1600 but that’s for EVERYTHING. My pension is approx £170 a month

I would definitely advise you not to break your pension contributions at all cost. The gain will be minimal and the chances are that some other life situation will present itself and rejoining the scheme will be put on the back burner.

Are you on the Nurse bank? Could you possibly work every other Sunday for a couple of months if your child goes to their other parent and use this money to get your current car fixed. Then bank the £4000 as an emergency stash in case it’s needed for a new car.

But you won't be 170 quid better off
...only about 120 quid maybe even less....definitely not worth it imo

Personally I would maintain your NHS pension and relook at the NHS car lease, I am sure the Suzuki swift my friend leases is not £270pcm

I'd look at all other options before doing this OP. I opted out when I was getting married and it was so easy when not opt back in when I should have. I didn't opt back in for 6 years and now realise I was a complete idiot to leave it so long. I'm in my 30's so hopefully have time to build up a decent amount still. You had to apply to opt back in if it's short term, though they do automatically re enrol you after 4 years now.

I was looking into opting out for a year or so but when I spoke to HR they said I'd lose my death in service payment and the pension would be stopped rather than deferred for that year. My family would need that if something were to happen to me so I stayed in. I also looked into the amount I'd get extra in my salary without it and as it'd have been taxed it was not as much as I was paying. I was part time then.

Thank you all for taking the time to reply, really appreciate it.

just to answer a few questions

i aren’t entitled to anything, I claimed UC when I was a student (after deductions I got about £300 a month), as soon as I started working I was over the threshold and now my claim is closed

The lease cars have significantly gone up in price, my band 7 has been in the scheme for years but the prices have gone up so much she’s opted out. Plus the ones I’ve seen on the fleet website have a lead time of 7-9 months till delivery

i couldn’t get a credit card with a big enough limit unfortunately or I would do that. No one in my family has that amount of money to borrow either but even if I did I would never dare to ask, haven’t had a penny off my family since I was about 16 (except the Netflix account if that counts 😂)

i can’t do any overtime really because I came to this job newly qualified so don’t have any of the competencies signed off in the hospital trust (which is a different trust to my community job) so unable to join the bank

But you are all right and have basically confirmed everything I was worried about in my mind such as the (god forbid) death in service benefit etc. I will just have to pray the car doesn’t fall apart, if it does I will simply cross that bridge when it comes to it so I will leave things as they are and keep playing the lottery!

Thank you again

I would also research the price of used cars at the moment.
I was driving an elderly Punto into the ground. An unfortunate accident, and it was written off.
Replacing it with a functional vehicle cost me £10,000.
I had an inheritance that was able to manage that amount, but the situation was terrifying.
The waiting list for new cars has driven up the price of second hand cars.
My elderly Punto yielded an insurance payment of £1,500. Previous valued at £600.
Cars are ridiculous at the moment.

I really wouldn’t. It’s such a valuable perk. You’re stealing from your future self really. As others say, theres a danger you die & your children lose the death in service benefits or you don’t opt back in.