Opting out of pension

When I started work 47 years ago, I knew what my take home pay was, so knew how much I had to spend and also knew that as a Civil Servant post, that I was in a Pension scheme, what that actually meant did not mean anything to me. The only time it was mentioned was when people compared what I was taking home and what other companies employees doing the same job were taking home, we were then told the extra money they got was going towards our Pension and we could always leave if we thought we could do better. It is only now that I realize how lucky I was. I think people should not have a choice, then they would not think I could be spending this money, certainly some needs to be taken directly from everyone and THEN the choice of paying more should be offered. I never earned a great deal over the years, so my retirement will give me as much as I take home per month now, well it will when the State Pension kicks in. 2020 now rather than 2018.

I didn't work for a company paying into a pension until I was in my 50s & in most of that time had no access to any other form of pension (until my mid 40s they just weren't available). If I was back in my 20s I would say if my employer is prepared to put £1 into my pension if I put 80p in - where do I sign.

Do you really want to live on the new basic state pension? At least because I had no access to other pensions I had SERPS. Could you live on under £160 a week. It doesn't sound too bad as a couple on £320 a week but can you guarantee that?

Opting out is only a good option for your employer - definitely not for you!

Are you seriously prepared to vote for a pay cut?

crv1963 wrote: »

I'm with you GibbsRule No3 on this one. I think that is why the Govt brought in Auto Enrolment, but financial education is poor as many on the scheme seem to think it will give them a secure retired lifestyle when in fact they need to be saving much higher sums for this! Also people can of course still opt out.


I suppose that there is no easy answer politically to this if you couldn't opt out then some would argue that they are having their choices limited.

Absolutely this. It is absolutely astonishing that financial education is not on the National Curriculum (I assume it still isn't). Schools teach an awful lot that will never, ever be used yet something that every single person will require knowledge of for their entire adult life isn't. Truly bizarre and very worrying for future generations, especially given that we live in the digital and social media age which is increasingly encouraging people to "live your life to the max now", which is also known as "give all your money to x, y and z brands."

I believe that financial education is becoming more & more vital to the future of our young people. That a 21 year old I knew could, without ever having a job or any further education (so no uni) having not attended school since 15 (leaving age 16) run up debts of £21k is way beyond shocking. With HMRC now denying their charter responsibilities and throwing penalties at all & sundry.

If these youngsters don't get some proper financial education soon their financial lives are in the bin. This should not be something which is effected by some government political agenda or an (even if well meaning) banks agenda. They need some proper independent advice.

badmemory wrote: »

They should never have allowed an opt out without an IFAs positive advice.

I totally agree with you, but most people go through their working lives and do not think about their retirement. Many see pension payments as a burden and do opt out. Others see 30/40/50 pm going out and think that they'll retire with the same standard of living as they have whilst working. Others see the whole pension situation as too big an area and close their mind to it and hope for the best.


I work with some really bright people who have the option of the NHS Scheme, which even with its' latest reforms is a really good scheme but some still opt out saying "I could use that 9% I'd pay for my holidays/ mortgage/ car" and when I tell them that it's crazy thinking I'm told well I could be dead next week, or my Dad dies at 60 so I won't get much back. Others (most) like me see it for what it is a dammed good scheme with good benefits!


The people that post on this forum (in my honest opinion) are a) seeking advice, b) helping others out in an altruistic manner, c) exploring and learning more to help make their own best educated guess/ choices about future planning. I class myself as a and c!


But my sons (20 and 21) have had no financial education other than by me, family or in the case of my 20 yo from older people in his workplace.