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

atush

xylophone wrote: »

The OP does say



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

Have they asked them for a loan?

Surely if the children are at school child care costs are lower as there are less hours to be looked after?

Would moving out to a cheaper ara allow one of you to go part time while the children need care? homes are cheaper and no child care to pay for?

PeacefulWaters

It's a totally insane proposal. Madness beyond madness. Absolutely the wrong place to try and reduce outgoings. Don't do it.

Looking at my own household budget and where I could save £350 a month if I chose to I'd consider the following (or have already done them):

Sky to Freeview - £70 a month.
Mobile phones to sim only - £70 a month.
Changing power supplier - £20 a month.
Daily sandwiches instead of paying for lunch - £80 a month.
Banning crisps, cakes and biscuits - £60 a month.
Beans on toast tea once a week - £15 a month.
Shop around for insurance on car / contents - £15 a month.
Never having a Starbucks - £20 a month.
No family holiday for a year - £300 a month.
Drive more carefully - £20 a month.
Walk all journeys under a mile - £10 a month.
Lights off taps off heating down regime - £20 a month.

There's around £8k a year there. You could also try renting cheaper. Change supermarkets. Utilise discount vouchers and loyalty schemes better. I know your budget will be different to mine, but seriously, find alternative savings. How about moving in with family for a year? eBay sale of junk? eBay sale of parental junk if parents agree?

But whatever you do giving up part of your pension would be utterly stupid and something you will regret when you get into your fifties and have had enough of your job but have no choice but to keep on working. It's a massively valuable benefit well beyond the contributions you pay in.

lindsaygalaxy

I also live in the SE and like you we are saving for a deposit, I am also a teacher. Rather than stop the pension I would post on the OS board or DFW and look at ways of saving money instead. Some months we find it hard and have a mini blow-out like a take-away or day trip out that isnt covered by Tesco vouchers! There is quite a lot of free or cheap stuff around and changing shopping habits can make a big saving. Also, 10k in the SE wont be enough so wil need to look at more ways to save. There are some schemes with local BS that offer an interest free loan to top up your deposit. You have to have saved 5% and they will provide up to 20k including on shared ownership properties. You pay it back when you sell the house or in 10 years. They will only give 3.75 income though.

dunstonh

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

So, you have taken into account tax, national insurance and potential tax credits reduction (if you get childrens/working tax credits)?

The figures you have given just indicate how insignificant the perceived gain you think you are getting is. £12,600 over 3 years is peanuts when purchasing a property. You can lose/gain that amount in a 5 minute haggle with an estate agent.

It will likely cost you ten times that in lost pension.

System

I have tried not to bite but I will need to say something!!
The usual reference to the poor old 'taxpayer' as though teachers do not pay tax. national insurance or pension contributions.


Big shock-YES WE DO!!!


Personally last year I paid a total of £19000 into all three combined. And no I am not on Leadership just an experienced teacher with long service.
.
When I retire in 4 years time I will have spent 37 years working dam hard to make a difference in some pretty tough schools. Yes I am fully aware that it was my choice to do so but will not feel guilty about enjoying the pension I have accrued and I believe I have worked hard for. I hate the impression given that I am on some gravy train that I have not contributed to.


I am fully aware that my pension is a good one but I did not join because of that all those years ago. Of course it will be helpful to me but please stop trying to give the impression we are all shirkers!!!




V.

dunstonh

Of course it will be helpful to me but please stop trying to give the impression we are all shirkers!!!

I don't believe any comment was made to suggest that. However, tax payers would benefit financially from the OP opting out.

PeacefulWaters

excelpaul wrote: »

The usual reference to the poor old 'taxpayer' as though teachers do not pay tax. national insurance or pension contributions.

Big shock-YES WE DO!!!

I value the teaching profession. It is seen by many as a lifelong vocation and I think it's right that the state recognises a teacher's contribution during their working life with a decent pension to see them through their retired years. I am happy to make my contribution to your pension.

But if a teacher does not value my contribution to their pension and seeks to prioritise other things in life ahead of their retirement income it will save the taxpayer money.

Personally last year I paid a total of £19000 into all three combined. And no I am not on Leadership just an experienced teacher with long service.

Teachers do pay one of the higher contributions into their scheme. But the taxpayer puts in more again. This thread was started by somebody who is close to making a reckless decision to ignore long term value in pursuit of short term benefit.

When I retire in 4 years time I will have spent 37 years working dam hard to make a difference in some pretty tough schools. Yes I am fully aware that it was my choice to do so but will not feel guilty about enjoying the pension I have accrued and I believe I have worked hard for.

Good. So you should.

I am fully aware that my pension is a good one but I did not join because of that all those years ago. Of course it will be helpful to me but please stop trying to give the impression we are all shirkers!!!

I don't see anybody saying that teachers are shirkers. If you choose to take it as implied you're over-sensitive at best and downright paranoid at worst.

Taxpayers pay teachers their wages. Taxpayers fund most of a teacher's pension. I don't begrudge this. I can't see any other posters objecting to it.

But the message needs to be got across to the OP that giving up a chunk of a defined benefit pension scheme like teachers and healthcare workers gave in the public sector is nearly always madness.

You should be telling them to maximise the benefits of their employment instead of taking offence where none was given.

patanne

You will find that phrase on virtually every thread where someone is suggesting opting out of teachers/nurses etc pension and it is said a little tongue in cheek to impress on that person that they are about to make a seriously bad decision. Also once they opt out it takes a very long time, if ever, to opt back in again, making it even more serious. After all, what would have happened to your retirement if YOU had opted out.

jamesd

What I suggest you do first is look at places that you want to buy and places that you could buy. Include places that need a lot of work or whcih are smaller or otherwise less esirable than you like. Once you have that range you will be able to work out savings targets and plan.

Now do the same in other areas where housing is cheaper but where family would still be reachable. There are lots of good schools around and lots of places that are close but not as close. What can those do to cut the time and perhaps also improve quality of life after you have made the purchase?

Then perhaps also try places further out that would involve more compromise of family distance but may cut costs more. Another possible plan.

Once you have those in place you can compare options and also see what real difference the pension money would make to the plan.

If family has money it's also possible to wonder whether they may want to help financially, either as an outright gift or informal loan arrangement. They will surely be aware of the financial difficulties involved in buying and how a larger deposit can save significant interest money.

jem16

PeacefulWaters wrote: »

Taxpayers pay teachers their wages. Taxpayers fund most of a teacher's pension. I don't begrudge this. I can't see any other posters objecting to it.

Apart from one and probably where the annoyance came from rather than everyone else.

greenglide wrote: »

I think we should stop paying pensions to teachers. They don't appreciate just what a good deal they get. And they all expect to retire at 55!

PeacefulWaters wrote: »

But the message needs to be got across to the OP that giving up a chunk of a defined benefit pension scheme like teachers and healthcare workers gave in the public sector is nearly always madness.

Absolutely agree. However most teachers are like most other people in that many don't actually understand what their pension scheme is all about and how much they would actually lose by opting out even if just for a short time.

If the OP was in a private DB scheme, would everybody be rushing to say don't do it because your shareholders are paying your pension?