Opting out of pension

mollycat

dunstonh wrote: »

Well, that is just stupid thinking. Hopefully, you are not doing an important role with Local Govt. And yes, my language is blunt on purpose. You need a right kick up the backside. You are not a child anymore. So, stop thinking like one.

Nail on the head.

OP, the imbecilic, near dead, don't need money, 55+ year olds that you so casually disparage in your posts are now reaping the rewards of sensible but uncomplicated financial decisions, (ie long term pension contributions), and looking forward (hopefully) to decades of enjoyment and financial freedom.

But hey, you go ahead and pocket your extra £84.

Not blunt enough Dunston, some people seem determined to disadvantage themselves.

Makes me wonder why we bother.

bigadaj

A few unfair commenst from a crowd of grumpy old gits, from the OPs perspective at least.

What do you think a 21 year old will be doing at the local council, chief exec?

bigadaj

mollycat wrote: »

Makes me wonder why we bother.

Wasn't aware you did.

Silvertabby

Stay - in - the - pension - scheme. We can't say it often enough.

If you are having temporary financial difficulties then, as a last resort, go into the 50/50 part of the scheme - ie, you pay half contributions for half pension.

I've seen many people like you opt out of the LGPS 'because the money is better in my pocket rather then the Council's..... because I won't get anything back for years....

One case which still makes me sad was the young man who wanted to opt out and take a refund of his (just under 2 years) contributions to pay for his wedding. He wouldn't take no for an answer, but promised me that he would opt back in once he could afford it.

About 4 years later his HR manager rang me to say that he had been killed in an accident, that one of his colleagues had gone to see his widow to tell her that she would get a tax free lump sum plus pensions for her and the three children, and to ask how long it would take us to pay the lump sum as she was desperate for money.

He never did opt back into the LGPS. His widow didn't get a penny.

Terron

You say you won't be retiring for 50 years, at 70. Maybe the state paension age might be that high then, but you would be able to take you pension at least 10 years earlier, and maybe you will want to. Having the option would be good.

The there is the possibility of getting it earlier. I know someone who was injured at work at 40 and got her pension then, based on double the number of years she had contributed.

Yes there is a value to having the money available now, but I still think contributing to such a great pension scheme is worth it.

I would concentrate on trying to increase your income, say by getting promoted. When it does put some of the increase in a regular savings scheme, and only increase your spending by what is left.

Bravepants

Yes keep paying into your pension. If you keep paying in the same amount you are paying now, assuming growth by inflation alone (2.9% per year) and compounding growth, your pot after 50 years will be worth nearly £600,000. According to my basic spreadsheet that is.

I know it's a DB scheme but just putting a rough figure on the pot size really shows the effect of small, regular amounts and growth.

DO NOT THROW AWAY YOUR PENSION SO YOU CAN SPEND MORE OF YOUR TAKE HOME PAY ON POINTLESS CRAP!

POPPYOSCAR

I would stay in for two reasons.

1. The high contribution your employer is making.

2. As your state pension will be in your 70s it will enable you to retire earlier than that.

Can you really see yourself working until gone 70?

Mnd

The biggest gain you will get from staying in is the ability to finish working early. I finished at 63, my wife will finish at 61, because we both had reasonable (not massive) pension arrangements. If you stick at it, with what you are paying in, with the employer contributions and tax relief, you could probably finish working at 55, and please believe me that will soon be here.
If you do decide to opt out, will you have the options to opt back in later?

Dorian1958

Could you live on £8000 p.a. in today's money because if you cannot live on it now, you won't be able to survive on just the state pension when you qualify for it. Don't see the point in opting out just to put it in the bank, when you say you could really do with it now, what real difference would £84 per month make? Do you need it to eat, heat your home? Or is it just for maintaining a social life? Don't do it, it may take a few years but one day you will be angry with yourself.

Superscrooge

Did you fail the 'marshmallow test' as a kid?

Seriously DON'T leave the LGPS and throw away an investment where for every £100 you put in, someone else puts in £300. Very few people have such a generous pension scheme.

Also if you should have to retire early through ill health LGPS will provide you with an ill health pension. You would be daft to reject all these advantages. That is why they would want you to take financial advice before withdrawing from the scheme, to try to ensure you don't make a very expensive mistake.