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Original poster

opting out of pension for 6 months

5 replies

Desmondo2016 · 18/10/2016 23:07

is this a shocking idea? I'm on a good pension scheme. hoping to take a year off on maternity leave and wondered if opting out (which we can do once and rejoin) would be stupid. I could then save the £400 contribution each month to fund my wageless months later. We could manage on a very tightened budget without doing this or we do have some savings which could fund it but would leave us with only a couple thousand in the emergency pot. I can't get my pregnant head around just how penalizing it would be and it seems like a potential option. this is an unexpected baby, later in life.

OP posts:

TroubleinDaFamily · 18/10/2016 23:19

Every fund is different, you would need your pension provider to extrapoloate foward what that the difference would be when the pension hits maturity.

user1468321775 · 19/10/2016 14:14

It depends on your maternity pay really. Legally you can't make any deductions from
SMP and in my experience most companies will cover your pension conteibutions - have you checked your pension scheme rules/mat pay policy to see what your company do?

ChessieFL · 19/10/2016 14:42

You may have life insurance cover as a member of the scheme which you would lose if you opt out. Also enhanced pensions for husband/children which may not be payable if you opt out. Don't forget you get tax relief on your contributions, so if you're paying in £400 you would only get back about £320 if you opt out (assuming basic rate tax). Also - will you really opt back in again once you have got used to the extra money? Better to try and manage through if you can!

dalmatianmad · 19/10/2016 14:44

I've opted out of my NHS pension scheme for 6 months because I'm totally skint and need any extra money!

Lots of my colleagues have also opTed out over the last year too

CuthbertDibble · 19/10/2016 15:16

Check what your contributions would be before you opt out, you may find that your contribution is vastly reduced whilst on SMP but your employer should continue to pay the same amount as if you were still on full pay.

If you opt out your employer will no longer have to pay anything (this could be a fair amount of money), you may also not be able to opt back in at your current level.

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