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

[pensionoptout]

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?

Has your children's father done the same?

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

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

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

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

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

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

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.

@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.

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?

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.

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

*ignore the "red"!

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

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

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?

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

Very very bad idea.

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.

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

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

@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.

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.

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.

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