Freezing Pension

meat_n2_reg

Hi

I have worked in Local Government for almost 20 years paying into pension , currently really struggling to pay the monthly payment for pension ( which will soon being going up)

Have checked with payroll and the monthly amount I pay into my pension is roughly £140 , and will get approx £95 extra per month if I freeze pension as NI & TAX will be payable on the £140

I would really like to carry on paying pension , but just can't afford to any more , have down sized car , shop at aldi etc and basically been as MSE as I can be , but still struggling

I do think that this really bad idea to do , but like many don't think I have a choice at the moment

Have checked if I can re join scheme once frozen and was told yes , so may be if I have 1-2 year break , things might look better ......

Would appreciate your thoughts

Thanks

BobQ

meat_n2_reg wrote: »

Hi

I have worked in Local Government for almost 20 years paying into pension , currently really struggling to pay the monthly payment for pension ( which will soon being going up)

Have checked with payroll and the monthly amount I pay into my pension is roughly £140 , and will get approx £95 extra per month if I freeze pension as NI & TAX will be payable on the £140

I would really like to carry on paying pension , but just can't afford to any more , have down sized car , shop at aldi etc and basically been as MSE as I can be , but still struggling

I do think that this really bad idea to do , but like many don't think I have a choice at the moment

Have checked if I can re join scheme once frozen and was told yes , so may be if I have 1-2 year break , things might look better ......

Would appreciate your thoughts

Thanks

You are right its a really bad thing to do and it would be better if you could find any legal way of not doing it. But this is easy for me to say. If yopu cannot afford the payments then you cannot afford it. If you have looked at all the other options you have no choice.

I'm not sure of the LG scheme rules about rejoining but you should check these carefully. 1-2 years seems a little vague! Do you have any reason to think that you might be in a better position to afford the payments in two years time? Would the two membership periods be treated as separate or joined up?

Edit Sorry I misread the bit about1-2 years. You appear to have been told you can rejoin whatevr the gap and were refering to your likely choice of the gap.

atush

I would get that in writing that you could rejoin. And even so, I feel you would not rejoin later as there is always 'somehting better' to do with the money.

What has changed these last few years for you? Were you not saving outside your pension as well before things were tight? Our family income has not gone up in 4 years, but our costs have. So we are saving a little less than before as increased costs eat into our finances.

so, do you have debt? Do you have savings? Do you own your own home? Mtg? Are you married?

xylophone

What other benefits does your pension carry - death in service perhaps?

As for things looking better two years down the line, why do you think this (realistically) might be the case?

It seems to me that once you have become used to the little extra you will find it hard to give up.....

Have another look at your budget. Or is there any possibility of getting a few hours part time work?

Poosmate

Hi Meat, I've been thinking the same thing as you but not just taking a couple of years break I was thinking of freezing it till I am ready to retire. I've been paying into mine for almost 25 year and am currently paying £87 a month.

Can I ask if you have only just got this notion or if it's something you've been thinking of for a while?

The reason I ask is because I've only just thought about it and the reason is that after the autumn budget chat thing the other day I just feel so disillusioned. I've worked for almost 30 years and for the majority of those believed I could retire at 60 (I'm female). Then it became 65. Aww! Then last year it became 66 and now it's 67! Topping that, we're faced with getting less if we ever manage to make it to retirement age. So I have another 22 years to work - how many more times is the retirement age going to go up? Is it even worth still paying into a pension there's a chance you're not even going to be able to draw?

If I was to stop paying into the pension I'd use the extra in my pay packet to pay more off my debts which would save me a small fortune in interest, then everything I'm paying on debts would be paid into my mortgage account. This would mean in about 9 years I'd be mortgage free.

I guess I'm lucky in that, although things are starting to hurt with the recession, there are still ways I can reduce my outgoings so I'm not destitute yet. So my thoughts are based more on despondency and disillusionment rather than desperation and destitution if you see what I mean.

Sorry for the long post.

Poo

kidmugsy

Poosmate wrote: »

I've worked for almost 30 years and for the majority of those believed I could retire at 60 (I'm female). Then it became 65. Aww!

In another thread people have been pointing out that the increase to age 65 was announced in 1993 and became law in 1995. The increase to age greater than 65 is because (i) people are living longer, and (ii) the public finances are ruined. You can't blame Gordon Brown for (i).

dunstonh

I've been paying into mine for almost 25 year and am currently paying £87 a month.

That is a very low contribution.

for the majority of those believed I could retire at 60 (I'm female).

For the majority of those you have held the misconception that you could retire at 60. For the majority of those your retirement age was 65.

Aww! Then last year it became 66

I very much doubt it became 66 last year if your age is likely to be 67. The 66, 67, 68 increases were done quite a few years ago (previous Govt). All this one is doing is brinigng them in earlier (the previous Govt was criticised for the delay).

meat_n2_reg

Hi

Many thanks for the replies

I have been thinking of my options to freeze pension for a while as the job I am in is very unsecure ( like most are today) can't see me being in this job for more than 6-12months
Also looking at a career change , therefore believe I will not be working in Local Government for much longer

The thought of having to work till 68 and paying into a pension the government can change at a whim is not appealing , looks like I will also be paying almost 200 a month once government increases pension payment

I was thinking of saving the extra amount from freezing payments into an ISA so it is liquid if needed , this will give me more options in the short term and help to build up savings which I will need for career change

I have in writting that I can re join pension if wanted to so can always fall back position if needed

Still looking at my options

Thanks All

atush

have been thinking of my options to freeze pension for a while as the job I am in is very unsecure ( like most are today) can't see me being in this job for more than 6-12months
Also looking at a career change , therefore believe I will not be working in Local Government for much longer

All the more reason to keep paying onto the pension while you can, even if just another 6-12 months. Every little helps as if you work elsewhere you will NEVER manage to do as good, much less better.

gadgetmind

meat_n2_reg wrote: »

I would really like to carry on paying pension , but just can't afford to any more , have down sized car , shop at aldi etc and basically been as MSE as I can be , but still struggling

I know it's a bit harsh, but if it's a struggle now, what will it be like when you retire? Every £1 you put into that pension now is a gift to your future self, and I do wonder how the future retired meat_n2_veg will look back on the current meat_n2_veg if you freeze payments into what's still one of the best pension schemes on the planet?