Should I stop paying into my Civil Service pension

malcindebt

I'm 29, been in the civil service 6 and a half years, currently paying intothe Premium Civil Service pension.

However, we're struggling financially and another £40 per month net would be helpful at this time.

So should I stop paying into the scheme for a coupleof years tillwe get back onto our feet?

I also have 6 years in a former employers pension scheme which is currently frozen.

JA1000

Are you topping up your pension, I didn't think there was an option to stop.

Andy_L

As a tax payer I'd love you to opt out.

For you personally, it may be less than £40 depending on whether you've allowed for tax relief or not. The danger is that you will never rejoin the scheme which means throwing away 3-4x your pension contributions in employers contributions

jh2009

A pension is a long term saving provision for retirement. In the short term, there appears no immediate loss to cutting or stopping contributions, but in the long term its a saving you could seriously regret.

The general election is due in a few weeks time, and its not impossible that after the election, there could be a review of the existing schemes. They may set up a new scheme for new staff that could be less generous than applies for existing members. The danger of opting out is that you may not be able to get back into your current scheme.

A £40 gain in contributions doesnt tell the full story in terms of the value of lost long term benefits, and lost employers contributions. For the sake of £40 you could be giving up a benefit package worth several hundred pounds.

You should also look at whether opting out affects any death benefits. Opting out may remove or reduce any benefits payable on your death. This is more of an issue if you have dependants.

dunstonh

However, we're struggling financially and another £40 per month net would be helpful at this time.

You wouldnt gain £40 though. That figure includes tax relief and NI reductions potentially. You would only gain £32.

Not only would you lose the pension benefits which are mostly paid for by the tax payer, you would also lose the death in service. So, the cost of replacement life assurance could eat that up. As others say above, you have very little to gain but very much to lose by opting out.

kindofagilr

As far as I am aware you can't opt out anyway, we have to be in our pension scheme.

If you can (which I think you can't) it would be a very silly idea, maybe you should head to the debt free wannabe board and post a Statement of Affairs they will help you scrape your £40 back from somewhere else (sky, intermet, mobile, gorceries etc)

Our Pension is the only decent thing going about working where we work, I wouldnt give it up at all.

Andy_L

kindofagilr wrote: »

As far as I am aware you can't opt out anyway, we have to be in our pension scheme.

Nope, you can opt out, I believe its a legal requirement to allow an opt out.

Thinking about it though, if you "opt out" you can join the money purchase alternative (partnership) and just get the employers contributions (3-12.5% depending on age) and death benefit/ill health cover. However I suspect that that then stops you from rejoining the appropriate defined benefit scheme