Should I stop paying into teacher pension to save a deposit?

Dinopaws

I realise that both of these pensions are very good and that is why it is a difficult decision to opt out.

I have worked out that between us we we gain approximately £350 per month net. This would equate to £12,600 over 3 years.

The more deposit we can save. We would borrow less in mortgage and will also pay less interest overall.

Once we have a house at least we can start to build up some equity which we cannot do by renting.

Dinopaws

kangoora wrote: »

T

It may be a drastic step for other people and of course there may be family or friend reasons for not moving but both your jobs are extremely portable I'd assume.


Just an option you might not have seriously considered?

Yes, we have considered moving away but we are reluctant to leave family and friends. We would also be concerned about school places as we have 3 children and are worried about being able to place all 3 children in a suitable school or even the same school!

xylophone

But your pensions protect spouse/children in the case of death/serious illness?

Some years ago, an acquaintance with two small children lost her husband in a freak accident which occurred while he was on duty - she had reason to be grateful for his public service DB pension scheme.....

kidmugsy

Dinopaws wrote: »

wondering if it would be a good idea to take a break from paying into our pensions for 2-3 years and save a deposit

"Should I stop paying into teacher pension to save a deposit?"

Taxpayers say YES.

kidmugsy

Because you wish to indulge your preference for the SE you are committing yourself to competing in a market swayed by foreign money, City money, and Bank of Mum & Dad money. The time to move is now because school-age children will make new friends for you.

P.S. If family is such a big deal, why are you paying for childcare? Isn't that what grandparents are for?

xylophone

P.S. If family is such a big deal, why are you paying for childcare? Isn't that what grandparents are for?

The OP does say

Our family also sometimes provide childcare which helps.

And it is quite possible that the grandparents are still at work themselves?

jamesd

Given your saving rate and likely incomes it seems quite likely that you could accumulate a deposit of perhaps £10,000 in a year just by using 0% for purchases credit cards for all possible normal spending. Limited by the rate at which you do normal spending.

It isn't necessarily a bad idea to stop paying into the pensions for a while but those are and will remain some of the best around so it will hurt.

Given that you're limiting yourself to a small area because of the current schools you'll probably need to do things like looking at flats as well as houses and looking at both on the edges of the possible search area. Also places that need work because that can lower the price by more than the cost of the work. That work can also be paid for by unsecured borrowing after you own the place, when it will no longer matter for your initial mortgage affordability and LTV calculations.

chucknorris

Dinopaws wrote: »

Greenglide/taking stock - Our children are in schools here and our families are also in the south east. Both of our pensions are going to change in 2015 and will no longer be as good as they were previously. I just feel we don't buy a house soon we will be stuck renting into retirement.

I am also in the TPS, yes it is changing, it is changing from an unbelievably generous pension scheme to an almost unbelievably generous pension scheme. You will never find better value than this. I really want to retire early, but the pension scheme is so generous I have decided to stay another 2 years, because I am also buying additional pension within the scheme and paying an EXTRA (over and above the 11% deducted from my salary) £2,300 per month.

atush

no no no no no no no no NO

atush

Dinopaws wrote: »

The problem is we need a deposit. This is difficult to save when you have rent, childcare etc to pay. We will probably be able to afford the monthly repayments since we are paying about the same in rent. Wouldn't it be better to have a house and have a few less years in the pension?

Child care will finish ( or be less) once the children are in school. So save more then (and dont have more babies?)

And it would not be a 'few less years' int he pension. Once you stopped paying into it, you will probably not rejoin.