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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To opt out of NHS pension to make childcare more affordable?

239 replies

pensionoptout · 06/02/2022 16:22

Am I going to regret this?? I've temporarily opted out of my NHS pension contributions to make our childcare expenses more affordable. It will probably be for around 18 months or so I think, hopefully less. Has anyone done this? Is it a bad financial decision? Confused

OP posts:
JuergenSchwarzwald · 06/02/2022 16:23

Has your children's father done the same?

HollowTalk · 06/02/2022 16:24

I would do anything I could to avoid this. Seriously, you will really regret it.

RoyKentsChestHair · 06/02/2022 16:24

Yea this is a bad idea. You say “our childcare” - What is your husband/partner doing to make childcare more affordable?

Original poster
pensionoptout · 06/02/2022 16:25

My partner is working as much overtime as he can. He hasn't opted out of his pension.

OP posts:
Overthebow · 06/02/2022 16:26

Terrible idea. Your NHS pension is be of the best around at the moment. Cut back on everything else first.

HermioneWeasley · 06/02/2022 16:26

It’s a bad decision long term. Is there any way you can afford to keep paying in? The NHS pension is very good and ultimately it’s a real false economy not to build up entitlement

Lazypuppy · 06/02/2022 16:28

Funny how its you opting out of a great pension scheme and not your husband.

Original poster
pensionoptout · 06/02/2022 16:29

It would be good if there was an option to pay a bit less in temporarily but it's a fixed percentage of my gross pay that they take, there no option to adjust it. It's all or nothing. Such a shame as I could probably afford to pay a smaller contribution.

OP posts:
Original poster
pensionoptout · 06/02/2022 16:30

@Lazypuppy

Funny how its you opting out of a great pension scheme and not your husband.

My wage is higher than his so my pension contribution is higher, meaning we gain more back short term if I opt out as opposed to him. He's working overtime to help us - I don't have the option of overtime in my job.

OP posts:
saveforthat · 06/02/2022 16:31

Yes you are mad. NHS pension is one of the best you can have. Don't opt out. What type of pension does your husband have, why doesn't he opt out?

Fireflygal · 06/02/2022 16:31

Why isn't your husband looking to do the same? If he is earning more through overtime I imagine his pension contributions are higher.

If it has to be done share the burden..9 months each.

LaPufalina · 06/02/2022 16:31

As an accountant, please don't. It's short term pain for long term massive gain red 🚨

LaPufalina · 06/02/2022 16:31

*ignore the "red"!

Viviennemary · 06/02/2022 16:32

I think its a very bad financial decision. I would do everything to avoid this.

FrownedUpon · 06/02/2022 16:32

Awful idea. Opt straight back in. Opting out of such a great pension should be an absolute last resort.

TakeYourFinalPosition · 06/02/2022 16:32

I would also do absolutely anything to avoid opting out. Can you reverse the decision or is it too late?

Is your partners pension also NHS?

Igmum · 06/02/2022 16:34

Don't opt out, don't opt out and don't opt out. Can you and he work more flexibly? Any other solutions? I know the childcare years are crazily expensive but this is such a bad idea

ThroughThickAndThin01 · 06/02/2022 16:34

Very very bad idea.

Shiningpath · 06/02/2022 16:34

This is only a good decision if it’s a one off AND you stay together into old age AND pension receipts are fully shared AND you have the opportunity to offset the missed years in future. Unless you can guarantee all those things it’s a bad decision.

FiftyshadesofSueGray · 06/02/2022 16:34

I wouldn't do it. Despite promising yourself you'll go back in, you won't. You will always tell yourself you need XYZ.

pitterpatterrain · 06/02/2022 16:34

It’s not great as I can’t see what the trigger would be for you to go back to it - the hit on your take-home is always going to seem “too much” and you’ll be 10-15 years down the road in a very poor setup for later life

Sit down and explore what else you can do to bridge this

Original poster
pensionoptout · 06/02/2022 16:35

@TakeYourFinalPosition

I would also do absolutely anything to avoid opting out. Can you reverse the decision or is it too late?

Is your partners pension also NHS?

Yes I can opt back in at any point.
Partner isn't NHS but is also public sector.

OP posts:
HeyDiddleDee · 06/02/2022 16:36

It’s one of the worst things you can possibly do to save money in terms of your long term financial health. Especially with a defined benefit scheme. Is there really nothing else you can do to cut back? I’m in a similar scheme and if we needed to save money I’d honestly look at things like switching our mortgage to interest only for the 18 months before I opted out of my pension.

Change123today · 06/02/2022 16:37

I didn’t have a nhs pension but I didn’t pay into a pension when I had to pay nursery fees - 16 years later my pension is a lot less than my husbands - I missed nearly 4 years.
I do regret it, I just wouldn’t have earned anything if I paid a pension as well :( I was planning to up my pension contributions this year but with everything else rising not sure we can afford it on top.

Dishwashersaurous · 06/02/2022 16:38

Honestly I can't do the maths without exact figures but long term you would probably be better off borrowing to pay for the childcare and stay in the pension.

Please please make this the last cost that you cut.

Are you using tax free childcare? It's not great but it does help. Plus some trusts provide subsidised nurseries