Why would someone want to opt out from a pension scheme?

crv1963

I know several well educated and competent in their field professionals who refuse to join the NHS Pension scheme, generally when asked why I get told

1) I don't trust the Govt to pay me a pension
2) It's better in my pocket now I can't afford it
3) I don't expect to live that long my father/ grandfather died when he was 50 something
4) I'm only 20 something.....why would I put money away for forty years time?

I also know several who have previously opted out and are now in scheme, regretting having missed sometimes twenty years of contributions as arriving in their 40s and 50s focused them on the 60s and beyond!

Sarahspangles

Cairnpapple said:

As someone said above, not thinking you'll live long enough to use it. My grandparents died at 39, 59, 71 and 71 and my mum at 49, so if it wasn't for my dad still alive in his late 70s I wouldn't have a lot of belief in my genetics taking me much past SPA.

Whereas another person would see that as a motivation to save towards earlier retirement. The shortest-lived of my grandparents/parents were 71 and 78 but both were in poor health by their early 60s, one losing their sight. I’d like to increase my chances of doing more of what interests me by retiring a bit earlier. 

I suppose if there was a genetic factor that might mean you wouldn’t live long past minimum pension age that would be a reason to save outside a pension wrapper so you can access it earlier.

incus432

kinger101 said:

While I worked at university, I knew of two people who opted out of USS.  One educated to PhD level.  The both said they didn't trust they would get anything out as the government would just stop it.

I suspect they were both just thinking about the short term decided the narrative after.

Some of the most educated people are also the dumbest - articulacy can help with self deception.  And I have seen they are sometimes prone to conspiracy theories, believing they understand the world better than the masses. 

westv

It reminds me of the scams where someone rings and tells you to download software or transfer funds from your account. I have seen these mentioned numerous times on tv etc. with warnings that you should never do anything like that but still people fall for it no matter how intelligent they are.

Silvertabby

westv said:

It reminds me of the scams where someone rings and tells you to download software or transfer funds from your account. I have seen these mentioned numerous times on tv etc. with warnings that you should never do anything like that but still people fall for it no matter how intelligent they are.

Variations of the 'your bank account has been compromised - you must move your money into this safe account' have been around for at least half a century.  Yet people still fall for it.

50 years?  Watched an episode of Ironside (1970s American police series) when I was stuck in bed with a bad cold.  Little old lady was told by a crook posing as an FBI agent that they needed her help in catching crooks at her bank, and that she should draw out her life savings in cash and hand them to him for safe keeping.  This being a 'happy endings' type of show, she got her money back - but this sort of fraud must have been a known issue even then.

Cairnpapple

Sarahspangles said:

Cairnpapple said:

As someone said above, not thinking you'll live long enough to use it. My grandparents died at 39, 59, 71 and 71 and my mum at 49, so if it wasn't for my dad still alive in his late 70s I wouldn't have a lot of belief in my genetics taking me much past SPA.

Whereas another person would see that as a motivation to save towards earlier retirement. The shortest-lived of my grandparents/parents were 71 and 78 but both were in poor health by their early 60s, one losing their sight. I’d like to increase my chances of doing more of what interests me by retiring a bit earlier. 

I suppose if there was a genetic factor that might mean you wouldn’t live long past minimum pension age that would be a reason to save outside a pension wrapper so you can access it earlier.

 I agree 100% on the early retirement and that's what I'm working on myself, but I can see how someone could go the opposite way. 

marycanary

I previously mentioned that before my retirement, I managed local government services with a staff of about 200 people. Out of this group, only two individuals hadn’t enrolled in the Local Government Pension Scheme (LGPS). One anticipated inheriting a substantial amount of money, while the other was a lifelong Jehovah's Witness. I was told that he confidently believed the world would end soon, which was why he chose not to contribute to a pension. I did not question him on his faith so do not know if this was correct.

incus432

marycanary said:

 the other was a lifelong Jehovah's Witness. I was told that he confidently believed the world would end soon, which was why he chose not to contribute to a pension. I did not question him on his faith so do not know if this was correct.

Back in 1983 I remember quite a few were confident we were facing imminent nuclear war and there was no point in worrying about pensions.

Ksw3

People join a DC scheme, see the £500 contributions is now £400 due to market fluctuations and decide its a load of crap and opt out. Much safer putting it under the mattress apparently...

Albermarle

Ksw3 said:

People join a DC scheme, see the £500 contributions is now £400 due to market fluctuations and decide it’s a load of crap and opt out. Much safer putting it under the mattress apparently...

Maybe they should realise that the £500 did not actually cost them £500.