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

whitesatin

As a retired teacher who ended up as a single mum, I was often tempted to opt out of my pension but so glad now that I didn't. I didn't start teaching till I was in my 30s and took early retirement but still ended up with a pension of £10,000 which makes life a lot easier than it would have been.

I know it is diffiucult to know you could be paying off a mortgage but at least you won't be having to fork out for repairs etc. There is something to be said for renting.

ermine

Dinopaws wrote: »

We live in the south east and currently pay £1100 per month in rent. We are fed up with renting and really want to buy a house to provide some stability for our young children. We are finding it really difficult to save for a deposit and was 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.

I was stupid enough to buy a house in 1988 at the height of the Lawson Boom - suffice it to say there are many similarities between now and then - prices going up, everybody believing they will go up for ever, hurry hurry hurry to get on the housing ladder.

Nothing I have ever done wrong in finance since comes anywhere close to the single most disastrous personal finance mistake I have made in my entire life. Buying that damned house. The advantage I have upon you is I didn't shaft my future self by diddling with my pension, or borrowing elsewhere.

You may not buy stability for your children by buying a house in a high, against a backdrop of distorting factors of historically low interest rates and stagnating wages. You may expose them to the threat of negative equity - I was in that house and saw the neighbours on both sides repossessed. I was lucky, and retained my job. Ten years after buying that house I reached the break-even point, after paying God knows how much money into the black hole of negative equity.

The best of luck to you, you'll need it. In the immortal worlds of Clint Eastwood, do you feel lucky?

atush

You forgot the 'punk' lol

mark55man

I know what you're thinking, punk. You're thinking "did I raise the interest rate to 6% or only five?" Now to tell you the truth I forgot myself in all this excitement. But being this is the fed, the most powerful central bank in the world and will blow your mortgage clean off, you've gotta ask yourself a question: "Do I feel lucky?" Well, do ya, punk?

Magpie170808

Move away from the South East!!! You can buy a good sized family house, with a garden, in very good condition and get change from £100K here in Manchester, and there are plenty of opportunities for work with the qualifications and experience you both have. There are good cultural services too if you know where too look. You might have to make a sacrifice in terms of moving away from friends and family but you'd massively gain in many other ways. Check out the North West, you have nothing to lose by having a look.

frugal90

north east of Scotland is beautiful and desperate for teachers


planes to visit family from Aberdeen or inverness to the south east




frugal

zagubov

patanne wrote: »

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.

Been there. Done that.
Made that precise mistake you're thinking of. . It's taking me forever and costing a fortune to put it right.

You could salvage something by learning from my mistake so it doesn't happen to you.


Don't don't don't opt out!

Spidernick

Aren't there shared-ownership schemes for 'essential service' (or whatever it is called) workers in teaching and the NHS? If so, wouldn't that be a good halfway house for now?

I would say to the OP not to let the kids' schools and friends stop them moving to a cheaper area - kids are much more adaptable than adults and would soon make new friends, etc. Yes, being able to get them into the same new school would be an issue, but easily researched.

I would love to have the benefits of a teacher's or NHS pension, so would add my voice to the 'don't do it!' camp.

patanne

I really think it is time that someone sent an email (maybe to their junk box as they may actually read that) telling all those in DB schemes just how stupid they would be to opt out. It would need to be a junk mail as they really don't seem to believe people who actually know what is what.

LHW99

Don't opt out now, as has been said, things happen and you may be very glad of the benefits built up.
We started out in the SE just as the first housing boom started - prices winging up swiftly. We saved rabidly for 2 years (absolutely no treats anywhere) and bought a small old, house in poor condition (hole in front window, bedroom window dropped out completely the first time it was opened), 5 miles outside the most popular town. Slept on the floor until we could afford a proper bed - BUT we kept paying into the pensions.
I was a teacher and thought that's what I would do until I retired, but I didn't. However, those early years have provided a pension almost the same as the state pension I am likely to get in about five years time, which means I won't suddenly suffer a drop in income at a time when I won't be able to make sacrifices easily.
Get the children to help suggest areas to save, and set some targets for saving - and plan for rewards (not too expensive) when you meet each one.