Pension or House Deposit?

Bimbly

I work out, contributing to your NHS pension scheme would cost you £170 pounds each per month.

Plugging the figures in at https://www.thesalarycalculator.co.uk/salary.php

A salary of £33,000 per year without pension contributions works out as £2,151 per month (standard personal allowance, not Scotland).

With a 9.1% pension contribution with salary sacrifice (ie, don't pay national insurance or tax on it -- tick the box on the calculator (untick contracted out (what's that doing there?))) you have take home pay of £1,981.

I left off the pennies. So a cost to you of £170 per person per month.

In some ways it's a lot of money, but in many ways it isn't.

Edmond_2

badmemory wrote: »

If I were you I certainly wouldn't be looking to inherit any time soon. I was 69 when I did after a few years care home fees.


If you don't stay in your pension scheme when will you go back in. What excuse will there be to not go back in? Because that is what often seems to happen.

Will rejoin the pension after I've saved for the house deposit, i.e. around 5 years.

atush

Beg borrow or steal to get at least you into the pension ASAP.

atush

There was a freak accident when the husband was at work and he was killed outright.

What would have been the position of that widow and her children without the spouse/child pensions?

Well if I as the widow, and there was an accident- i'd be suing the employer.

Will rejoin the pension after I've saved for the house deposit, i.e. around 5 years.

Wrong answer. Join pension AND pay off debt. When debt is gone THEN save for deposit- with at least the main earner still in t he pension (but I would say both).

there is ZERO point in saving for a deposit if you are in debt, and ZERO point in not joining the pension as it so worth so much more than the 9%.

enthusiasticsaver

Coming out of an NHS pension is a big mistake. The 9.1% you put in is technically not 9.1% once the tax relief is taken into account and the amount of benefits you build up would be worth far more over 5 years than anything you can save up towards a house deposit. Having no or little occupational pension means you are likely to be living on the bare minimum in retirement. 5 years is a lot of benefits to give up. You also have no death in service benefits if you are not in the pension scheme so if you die your widow gets nothing and vice versa.

Look at your other expenses and see what you can drop before you cease paying pension payments. You cannot assume you will inherit your parents house. It may need to be sold to pay for their care in old age if they need it.

TheShape

Edmond wrote: »

Will rejoin the pension after I've saved for the house deposit, i.e. around 5 years.

I'm out drinking at the moment so my judgement is probably impaired. I'll check back in the morning to see if this statement is as mental as I think it is!

Edmond_2

TheShape wrote: »

I'm out drinking at the moment so my judgement is probably impaired. I'll check back in the morning to see if this statement is as mental as I think it is!

This was the original question - is it worth halting the pension for five years and getting a house?

zagubov

Edmond, here's a fun fact. My first job was working in the NHS. I was in the pension.

When I went off to further study I was advised to cash in my pension as the cash would be more useful to a struggling student. I stupidly agreed and I have to tell you it has taken me decades of complicated and massive overpayment to catch up with my pension.

In the name of all that's holy, don't leave the pension.

JoeCrystal

Edmond wrote: »

This was the original question - is it worth halting the pension for five years and getting a house?

No, it isn't worth it What if you find that you couldn't join in five years later due to another reason, another excuses and then you would never join in. And you might find yourself needing to use the savings for an emergency reason as well and then you will be back at square one and still have no pension provision. Are there any chance you can reduce your debt payment to start pension for example?

So for your sake and for the sake of your family, both of you should join right away. You don't know what will happen over next five years after all.

crv1963

Leaving the pension to pay down debt and save for a house deposit is definitely the wrong thing to do! £340 pm, sounds a lot of money, but the money covers a lot of things so is worth far more to you. Death in service benefits, survivors pensions (in the wifes case for life) are very expensive on the open market.


If you don't rejoin you'll find that there will always be a reason not to- need a new car now, need to fund x school trips, a holiday, house repairs, another child etc.


Work out a debt management plan that maybe takes a little longer, save a deposit slower- there really isn't a mortgage cut off point in your 40s!


My death in service benefit from the NHS would cover our mortgage, or the survivors pension would cover the payments and then some, so really, really think this through, every year out is less eventual pension, you are robbing your future self for the here and now and it isn't worth it!


What it costs now doesn't compare with how beneficial it is later- Mrs CRV has always worked private sector, low pension provision, I've always worked NHS paid into pension. I can retire October on mine, she has to work another 16 years for roughly a 3k pa PP and the SP.


We're not doing that we're both working another 3-5 years and putting all of her earnings into her pension so we can both retire at the same time. Had she not left the NHS (and more importantly its pension scheme) we'd both retire in 2022 with 43k pensions between us!


The above example is a live one, which I hope illustrates the benefit of the NHS pension to you!