Pension break to save for baby

[KateyA]

Hi
I’m consuderinv having a baby alone. While I’m in a good job obviously money is going to be tight going it alone. I am considering taking a one year break from making pension contributions as that would help me save a relatively significant amount prior to the birth.

I’ve been paying into a pension since I was 25 so I’ve accrued a fair bit so far so figure one year shouldn’t hurt.

I’ve also just switch job so I’ve already lost the continuous pension payment bonus my previous employer offered.

Any thoughts or ideas about pros or cons to this I might not have thought of?

If your employer offers a match, it's free money you're turning down, so I'd try to think of anything else you could cut instead if that's the case. What's their policy?

Don't do it - pension savings are marvellously tax efficient plus as muffin says if you get a matched contribution you will be missing out financially

Can you declutter and Ebay? Cut down on coffees? For the past month I've been dieting and so have brought food into work rather than spending £5 a day for lunch and that does actually add up. Go to a cheaper gym or not at all and take up running instead?

Say you're a basic rate taxpayer.

You pay £100 into your pension. Your employer pays £25. Your pension fund accrues £125 plus all the investment returns on that £125 from now until you retire.

You decide not to pay into your pension. You get zero matched contribution. You get the £100. Except you don't because it gets taxed at 20%. So you get £80.

It makes no financial sense to do this.

ahhh ok I need to think.

Thank you for your thoughts

It’s just so tempting cos my pension contributions from my wage packet are near £400 per month so that plus all my other no coffee, bringing lunch etc savings would mean I could tuck away a really good fall back the 10 or so months before baby. I’d then planned to go back to paying into pension for the next zillion working years til I retire!

The previous months prior to baby would help pay for the fertility treatment incase that sounded confusing!

If you are putting in more than your employer matches you could drop down to whatever they match, as a compromise position?
Whether you stop or reduce, its going to be very tempting to stick at the lower level for just one more year (childcare costs a bomb...) and just one more year again etc, it could be a slippery slope.