Downsides to temporarily reducing pension contribution

cruyff73 · 14 July 2006 at 10:29AM

I contribute to a pension scheme in work to which my employer adds their little bit. Money is going to be a bit tight for the next 3 years due to my wife going to back to education and therefore only having one income. The thought is to reduce my pension contribution to a bare minimum and putting the rest in an Instant Access ISA 'just in case'. Any thoughts - good idea or bad?

dunstonh · 14 July 2006 at 10:36AM

We cant say if its good or bad as we dont know your financial position. However, we can say that anything that you dont pay in will be less you get back later and if you are missing out on "free" money from the employer, it could work out to be quite a bit over a 3 year period. Without figures though, we cant tell.

cruyff73 · 14 July 2006 at 10:56AM

Not a massive amount tbh. Overrall contribution is £180 including employers freebie which is approx £25, per month. While there's going to be enough coming in to cover everything there won't be a lot of 'wiggle room' if something crops up and I really want to avoid using credit, so the thought was to continue contributing £50 to the pension and £100 in an ISA.