@Blossomtoes
That’s a real eye opener
*@babyjellyfish*. It’s terrifying, isn’t it?
I really hope you’re opting straight back in again @pensionoptout.
It is indeed.
My figures are a bit rough and ready, but I just wanted to demonstrate what even a temporary pause in contributions can look like.
@pensionoptout, I don't know if you are still reading this, but if you are, can I suggest that you find your most recent pension statement and see what your pensionable pay is? (If you can't find that info, just use your salary.)
According to the NHS pensions website, if you are in the 2015 scheme, you accrue a pension of 1/54 of your pensionable pay. So if your pensionable pay is £30k, for example, you would be earning about £555 per year in pension. That means that missing one month's worth of contributions would cost you £46.25 per year (in today's money) for every year that you are retired.
Even if the state pension age rises to, say, 70 by the time you retire, and you live until you are 85, missing one month of contributions on a salary of £30k would cost you £693.75 over your retirement, and missing 18 months' worth would cost you £12,487.50 over 15 years.
If you earn more than £30k, opt out for longer than 18 months, are retired for more than 15 years, or are not a member of the 2015 scheme but one of the earlier (better) ones, the amount you lose will be higher than that.
Do the sums, OP.
Work out how much it will cost you per month, per year, and over your whole retirement based on average life expectancy. Then compare that to what you are saving in contributions (which may be less than you think given the tax issues) and decide whether it's really worth it, or whether you'd be better off trying to cut costs elsewhere, for example by getting rid of your Netflix subscription or trying to cut your food bills by batch cooking cheap meals, or perhaps trying to get some overtime.
And as someone else said, apply for those promotions now! Don't wait until the time is right. Carpe diem. If you get promoted sooner than you think, it will get you out of your current tight spot and you'll have an even better pension.
One final thought: these defined benefit public sector pensions are very advantageous and consequently very expensive. That's why they're constantly changing them. If you're a member of one of the older schemes rather than the 2015 scheme, you've already got a better deal than any new joiners can get today (and I really hope you'll be able to pick up where you left off and not be told that you've got to join the 2015 scheme now). If you're a member of the 2015 scheme, it's been going for 7 years already and it wouldn't surprise me if it gets closed to new joiners before too long and anyone who joins the NHS pension scheme after that gets the next, less beneficial iteration.