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?

Get back in immediately. It's not fun approaching retirement age and having to work longer to make up your money. Seriously, it's the worst situation to be in.

If you die in service then your partner will lose out big style.....my NHS death in service award is well over 100k .....or if you become seriously ill .....then you will get minimum I’ll health retirement.....it won’t be made up to pension age amount...... you just don’t know what is round the corner..... start paying it again ASAP OP

@Polkadotties

Let’s hope you don’t pass away during the interim if you opt out. Having to explain to grieving relatives that their loved one opted out and therefore no benefits is one of the hardest parts of my job

I’ve had to tell a grieving widow that her husband had opted out. She had no idea. Death in service payment would have been almost £200k. Two young children; he was only in his early 40s.

She reckoned he opted out because he had massive credit card debt that she wasn’t aware of - expect he planned to opt back in when it was paid off.

@Mickarooni

Has he got a pension? He should be doing the same. You say “partner”, are you married?

Not married

Yabvu-you will regret it!

YABU

Can you switch to nights/ weekends/opposite shifts?

[quote Jvg33]Make sure you have registered for tax-free childcare. You are eligible if you are both working with no benefits. I didn't know about the scheme and missed out on about 800 pounds. I attempted a complaint but I was unsuccessful. www.childcarechoices.gov.uk/how-to-use-tax-free-childcare/[/quote]
We are claiming this already; but thank you

So he keep his pension and you cut yours - but if he ever leave you, finances aren’t split equally. Wake up - opt back in - look after the interests of you and your children.

@Tootiredallthetime

OP there are lots of vacancies in the NHS right now. Are you sure you couldn’t go for a job at a higher band? Where I work, we are promoting people quickly. The best way to sort your finances quick is to get a payrise.

The higher the salary the higher the pension contribution.

I quite like the idea of 9 months for me and 9 months for DP. Will suggest this to him and see what he says...

And will continue to look at other areas to make cut backs 🙈

The death in service thing has really troubled me. It would leave my partner and DC in a crap situation. I hadn't realised.

If you're the higher earner, the last thing you want to do is reduce your hours, as that would have the biggest impact in reducing your income. Would be better to do an extra shift or two when your DH can look after DC so no childcare costs. Definitely don't opt out of the pension.

Have you done everything else you can to free up the money?

Reduce all your bills and live frugally, no Sky etc, eat some cheaper meals made with food from cheaper supermarkets. Sell things you have but don't use.

Minimal gifts, none anyone outside your immediate family, only little ones for DC, they're too young to notice anyway, no holidays for a year or two, do cheap local days out instead. It's only a year or two to get through.

Probably worth doing an online calculation to see how much equivalent life insurance would be over the period, to factor into the calculations.

Could you do weekend shifts so no childcare costs, as husband could look after the child. Rubbish for family life but just for a couple of years until the 30hours kicks in.

I have had to opt out before because I simply couldn’t afford my rent and bills.
It was fine as I was able to get back in fine and had no penalties for doing so.

I think pensions are so important but I’d rather not skint myself and have a difficult life now just to save for the future.

Have you looked into paying in less for a few months instead of nothing at all?

Apart from anything you’ve lost your death in service benefit.

As a two parent family I would look into working evenings and weekends instead so you won’t need childcare.

Is there not the option for you and your partner to condense your hours in to 4 days so that both of you have different days off to cover childcare?
Please go back in your pension immediately, look to cancel other things first, tv subscriptions, takeaways, hobbies that can be put on hold.

And you’re not married?! Bloody hell. Get yourself back into the scheme. And into a registry office.

www.gov.uk/bereavement-support-payment

You only get the above payment if you’re married. So, in all seriousness, if you are not restarting your pension tomorrow for the death in service allowance alone (and you would be stupid not to I think) then get married as fast as you can.

@WonderfulYou

I have had to opt out before because I simply couldn’t afford my rent and bills. It was fine as I was able to get back in fine and had no penalties for doing so.

I think pensions are so important but I’d rather not skint myself and have a difficult life now just to save for the future.

Have you looked into paying in less for a few months instead of nothing at all?

You can't pay less with an NHS pension - they take a fixed percentage of your salary depending on banding. It's fully in or fully out, no in between unfortunately.

@Helenluvsrob

Apart from anything you’ve lost your death in service benefit.

That doesn't sound wise

You're the higher earner but going to reduce your hours? Makes zero sense

You're already using the cheaoest childcare option available ie childminder - what does the childminder cost per day - my area it's £35 - surely you must earn more than that per day?

I'd be sacrificing the holidays before the pension

Seems to me you did zero financial planning about affording a child and are just panicking right now and making really really poor financial decisions

Who is most likely to die/the family would struggle most without their benefits?

I reduced mine (not NHS) to the minimum temporarily for 2 years for similar reasons. Didn’t start paying again for approx 6 years and even then it wasn’t enough. There was always something else that we needed money for.

I’m 50 now and bitterly regret it. Fortunately I was married so I have access to his. You don’t even have this.

It seems a good option now, but could add years to your working life.

Your mad.
And you will regret it.
My NHS pension is tiny because i was allowed to draw the cash out , twice, I really wish I hadn’t.
Luckily I’ve reached my 60’s with my marriage intact so share dh’s.
You’re not even married.

I stopped mine when I went on my first mat leave and they changed the benefits whilst I was out of it. When I rejoined my benefits weren’t as good. It didn’t even save me that much cash at the time but I was younger and naive about pensions.
I would say make whatever other changes you can, in my case less days made financial sense as I came home with more cash than if I’d have done another day a week due to childcare and deductions.