Temporarily Reducing Pension Contributions

[Charcol]

Been reading articles on how more folk are now reducing their employee contributions or even stopping altogether, due to cost of living.

It defo has its pros and cons, and I can see how one could be robbing yourself of their future. But can totally understand why people are doing it.

Now even considering doing it now myself. Im currently doing 6%, and considering reducing to 4%.
Has anyone else done likewise and What % are you contributing currently?

I can absolutely understand the temptation but imo it needs to be the last thing to go

I have been thinking about this also but my husband says I shouldn’t have I’m keen to retire early. My work contributes 10 % if I contribute 7% and they will contribute less if I reduce mine so decided against it though I’m barely able to afford direct debits

I've reduced mine
Can't remember the exact contribution but work are offering for 12 months if we reduce our contributions, they will keep their contribution the same

Don’t, just don’t.

That would be the absolute last thing to go for me. I am lucky though as I’m civil service so I contribute almost 10% and my employer contributes almost 30% 😵. I’m not well paid though so if I halved my contribution (which is the only option not different percentages) I’d save myself around £75 a month but lose about £150 a month (if I understand it correctly).

I reduced mine as well but my work only put a flat 5% in regardless of how much I put in. If reducing my contribution reduced theirs, I would have held off.

I would only do this as a last resort. You lose far more than you gain. It will mean you have to work longer before you can afford to retire.

The trouble with reducing contributions temporarily is that the temporary arrangement often turns permanent. Cut everything else before you reduce your pension contributions.

No, I wouldn’t consider this. There is an absolutely enormous gender pension gap in the UK, it’s much worse than the gender pay gap and the state pension isn’t very generous.

I overpay my contribution by a large amount.

One could be robbing yourself of their future

This sentence has broken my brain a bit.

I’ve thought about stopping my pension contributions but then I get the fear. If I was struggling to afford things I’d do it.

No, I'm still ensuring 25-30% goes into pension funds.
For 23/24 the government increased the annual tax free allowance from £40k to £60k.

I didn’t start paying into a pension until I was 30 so it also needs to be the last thing I cut too. I pay in the maximum that my employer will match.

It’s not worth it! For me, cutting contributions from 5% to 3% would only give me £48 more in my pocket a month. But in 30 years time it will (hopefully) be worth much more than that.

I stopped paying into a pension years ago as I couldn’t afford to put anything into it.

I currently pay nothing but have no idea how to change that and I’m not sure I want to.

I think it depends on your situation. My wage is pitiful by MN standards and there is nothing more to cut so I decided to take the offer from my job of reducing my payments while they keep theirs
Given the amount of health issues I also have I'm not sure I will have a long retirement and I'll have to work past retirement age more than likely
My wage is what some people seem to be aiming for in their retirement

I hear what everyone is saying, and tbh this is like my last resort.

For me I have been paying in the max I can with employer contributions since age 21 and have kept that up til now in my mid-30s.. However I have a ton of debt to get rid of and having my lightbulb moment with regards to this.

I’m hoping I am ahead of the average pension curve, so if I stop for 9-12months, To help get rid of the debt, then jump back on to the max, it will be worth it. At the moment with everything so high, there is no other way for me to up my income and get rid of the debt faster.

But everyone has different circumstance right, and has to make their own decisions. And tbh its not one I am taking lightly. So will endeavour to keep the reduction as temporary as poss.

Don't forget the tax benefit from making pension contributions. Depending on the scheme you are in, how the money is contributed and what tax bracket you fall in but reducing your pension contribution by eg £100 won't give you an extra £100 in your pocket.

You would be crazy to do this. Pension shouldn't be an option - it's your retirement salary. How do you picture your retirement? I certainly don't plan on being poor after working my ass off for decades.

People should be increasing them not cutting them. Please think about the money you want when you're older. Save as much as you can because the state pension isn't much at all. Barely food and utilities and that's assuming you qualify for the full amount.

I try and max the annual allowance each year where possible. I know this is not possible for all but every £1 contributed costs you 80p or 60p if you're a higher earner. That's 20p or 40p free. Then it compounds. So becomes thousands in free cash, then you take 25% of that tax free. If you get bonuses some years that should all go in.

Pay yourself first. Retirement funding isn't a choice it's a necessity, Britain needs to change its mindset on this.

We have reduced our pension contributions for the time being. I have an (Irish) public service pension so that's still going but I've stopped the AVC's. My husband is only contributing the minimum he needs to to get his employer contribution now.

We're in the process of buying a house, the sale will probably close around February and things are extremely tight at the moment so we're cutting back wherever we can. We'll restart once the sale goes through so it'll only be around a 6 month pause and means we can save an extra €500 a month towards our deposit.