Pension

[paintedpanda]

I'm considering leaving my NHS pension scheme for a year while I try and save for a house with my DP. I'm struggling to make ends meet with my salary (newly qualified band 5). Does anyone have any advice? Would my pension be affected in the long term?

Not sure on specifics of NHS but you just can't opt in and out of mine when it suits. I absolutely wouldn't opt out - the NHS pension is much more generous than private firms isn't it? And what's it going to give you really - probably less than £100 a month which isn't going to go far for a house deposit over 12 months?

You’d be faaaaaaar better off doing bank shifts to up your income than stopping pension payments (which should be an absolute last resort).

The cumulative impact of not paying into a pension is massive.

The money you save early in your career makes up the bulk of your pension savings. (As it has so many more years to build interest).
Over your life, you'll be much financially better off if you wait longer to buy a property but keep putting into your pension.
However, I realise it doesn't always feel like that. Right now I've stopped pension contributions as I'm on mat leave and every penny counts

@ivfbeenbusy

Not sure on specifics of NHS but you just can't opt in and out of mine when it suits. I absolutely wouldn't opt out - the NHS pension is much more generous than private firms isn't it? And what's it going to give you really - probably less than £100 a month which isn't going to go far for a house deposit over 12 months?

It’s £150 a month, assuming no overtime/antisocial hours payments.

Your pension should be the very last thing you cut when absolutely necessary. You may not be able to opt back into the same scheme and you'll always find a reason to delay making that financial sacrifice again...new kitchen, nice holiday, new car etc. Before you know it you have a 15 year shortfall in your pension fund.

Short term gain, long term loss.

As someone has already said if you can do overtime/bank shifts it’s a much better option. When I was a newly qualified nurse saving for a house deposit I would do overtime on my ward if it was available and if not I was on the bank and an agency so most weeks I could do an extra shift and managed to save around an extra £400 Per month doing this. You don’t end up saving that much coming out of the pension as your pension is deducted pre tax so you will end up being taxed on what you would have paid in If you see what I mean so it doesn’t give you as much as you are currently paying in. Sometime I would turn an early into a long day with overtime or if I was on a week of 3 night shifts book a 4th on the bank as I was already in the routine etc.

Does he pay into a pension and is it private or public sector? If private, it's better for him to opt out than you as the £150 you're putting in will be worth more in the long term.

Explore all other options before opting out.

The NHS adds 3 times that as well. So you’d lose £600 worth of contributions which cost you £120 a month.

A tale of caution on this. My mum opted out of the nhs pension when we were small. Ended up not joining back in to very late. She has watched all her colleagues retire over the years and is doing her last year now to retire at 66 to get her state pension.

I took a year career break and opted out during that time and it does change my projection compared to my peers.

Remember the money that goes into your pension is not taxed, so if you are on the basic rate £150 would equate to £120 in 'your pocket' and if you were on the higher rate equate to only £90 (I think) .

Also if you opt out (if you can) I don't think your employer will be paying into it either.

I wish I'd started earlier and paid as much as I could into my pension...

Ah ok well still £150 over a year isn't going to make much of a dent in a house deposit
With it being no taxable hour tax will also go up so you won't actually get £150 in your pocket