Is it worth paying into my pension?

[Princess Ariel]

I am a nurse in the NHS, I qualified 4 years ago and am 42 this year. My DH is 46 and only pays into a workplace pension which is about £50 a month. I pay 9.3% of my pay into my pension which is usually around £200-250 a month.

We rent a housing association property, we are extremely unlikely to ever be in a position to buy and would therefore be renting for the rest of our lives.

I have been on a benefit calculator this afternoon and I’m not sure if it’s actually worth me paying into my pension? It seems as though by doing this when I retire my pension will basically be used to pay my rent and council tax, whereas if I only end up receiving state pension I would receive full housing and council tax benefit to cover this?
The reason I’ve been looking at this is because I’m seriously considering reducing my working hours from 34.5 to 23 hours a week, my job is extremely stressful and I have ongoing personal and family issues, and if I wasn’t paying into my pension I could afford to do this, especially if I’m not actually going to get any benefit from the pension!

If anyone has any insight into this any advice would be greatly appreciated.

[123]

Originally Posted by Princess Ariel

I am a nurse in the NHS, I qualified 4 years ago and am 42 this year. My DH is 46 and only pays into a workplace pension which is about £50 a month. I pay 9.3% of my pay into my pension which is usually around £200-250 a month.

We rent a housing association property, we are extremely unlikely to ever be in a position to buy and would therefore be renting for the rest of our lives.

I have been on a benefit calculator this afternoon and I’m not sure if it’s actually worth me paying into my pension? It seems as though by doing this when I retire my pension will basically be used to pay my rent and council tax, whereas if I only end up receiving state pension I would receive full housing and council tax benefit to cover this?
The reason I’ve been looking at this is because I’m seriously considering reducing my working hours from 34.5 to 23 hours a week, my job is extremely stressful and I have ongoing personal and family issues, and if I wasn’t paying into my pension I could afford to do this, especially if I’m not actually going to get any benefit from the pension!

If anyone has any insight into this any advice would be greatly appreciated.

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You should be paying at least 5% into your pension (unless you opt out of your pension plan at work).

Now the NHS pension plan is about the best there is in the Uk so opting out would be a mistake. Not just that if you opt out you remove the employers obligation to pay in as well - which is essentially a 3% paycut at least.

You are also assuming that state pension will remain as high (and it isn't that good) as it currently is - I see this getting worse to pay for the last 6 months.

Drop your payments down to the minimum (5%) if you have to, but think really hard about actually stopping

[GoldenAvalanche]

Have a look at what the NHS contribute, I think you'll find it's more generous than most private sector employers so you'd be losing out on those contributions. Have you done a pension calculator for you both? Would you be entitled to the benefits if your DH has a pension, aren't they usually household based? It seems a bit risky to me, you can't bank on the same benefits being available in 25 years, you still have a lot of working years ahead of you, but perhaps a financial adviser would be best to talk to?

[Apricota]

I t is worth contributing to a pension. It will grow between now and when it is able to be taken and your employers will also contribute (free funds). Counting on state benefits (at say 70 years old) still being available seems like a retro step. It will be good if they are, if not would you still be able to work age 70, 75+ etc

[Princess Ariel]

Thanks everyone, I’ve done some more reading and research and it does look as though I’m better off by continuing to pay into my NHS pension... I’ll have to work out now if I can afford to still reduce my hours down to 23 a week 😂

[munmun]

Originally Posted by Princess Ariel

I am a nurse in the NHS, I qualified 4 years ago and am 42 this year. My DH is 46 and only pays into a workplace pension which is about £50 a month. I pay 9.3% of my pay into my pension which is usually around £200-250 a month.

We rent a housing association property, we are extremely unlikely to ever be in a position to buy and would therefore be renting for the rest of our lives.

I have been on a benefit calculator this afternoon and I’m not sure if it’s actually worth me paying into my pension? It seems as though by doing this when I retire my pension will basically be used to pay my rent and council tax, whereas if I only end up receiving state pension I would receive full housing and council tax benefit to cover this?
The reason I’ve been looking at this is because I’m seriously considering reducing my working hours from 34.5 to 23 hours a week, my job is extremely stressful and I have ongoing personal and family issues, and if I wasn’t paying into my pension I could afford to do this, especially if I’m not actually going to get any benefit from the pension!

If anyone has any insight into this any advice would be greatly appreciated.

See more...

Can you actually opt out? I didn't think you had a choice with the NHS pension.

Do not rely on what is available now to create your pension finances there are two many variables that could happen.

It is also interesting that you would be happy to rely on state benifits when you could make provision for your own retirement. It is always tough when you are working. Maybe change to a less stressful position.

[sully301]

Originally Posted by munmun

Can you actually opt out? I didn't think you had a choice with the NHS pension.

Do not rely on what is available now to create your pension finances there are two many variables that could happen.

It is also interesting that you would be happy to rely on state benifits when you could make provision for your own retirement. It is always tough when you are working. Maybe change to a less stressful position.

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Yes you can opt out but you're automatically opted in.

[Princess Ariel]

Yes you can opt out, I know quite a few nurses who have already done so which is why it got me thinking.
I didn’t say I would be happy to rely on state benefits, I apologise if that’s how it came across, I just meant that it seemed pointless working extra hours and paying £250 a month into a pension when it may not actually benefit me in retirement due to the fact we rent our property.
I love my job but as I have ongoing personal issues with DS I do find it challenging at times juggling the two, particularly when DS is relapsing (which is often) I also work long days (12.5 hour shifts) which can be tiring when also dealing with personal issues.
It doesn’t help that I work with older adults and quite a high number of our patients are late 60’s early 70’s, have recently retired and then receive a dementia diagnosis and end up on our ward because they are so unwell... kind of adds weight to the ‘live for now’ attitude.
I have decided to continue to pay into my pension anyway after doing more research and will look into reducing my hours at work if I can to give me more time at home.

[munmun]

Originally Posted by Princess Ariel

Yes you can opt out, I know quite a few nurses who have already done so which is why it got me thinking.
I didn’t say I would be happy to rely on state benefits, I apologise if that’s how it came across, I just meant that it seemed pointless working extra hours and paying £250 a month into a pension when it may not actually benefit me in retirement due to the fact we rent our property.
I love my job but as I have ongoing personal issues with DS I do find it challenging at times juggling the two, particularly when DS is relapsing (which is often) I also work long days (12.5 hour shifts) which can be tiring when also dealing with personal issues.
It doesn’t help that I work with older adults and quite a high number of our patients are late 60’s early 70’s, have recently retired and then receive a dementia diagnosis and end up on our ward because they are so unwell... kind of adds weight to the ‘live for now’ attitude.
I have decided to continue to pay into my pension anyway after doing more research and will look into reducing my hours at work if I can to give me more time at home.

See more...

Good luck with what ever you decide it sounds as like you need to lighten your load a bit.

[Hmr89]

If it was me I think that I'd be a little worried that the sysytem may have changed come retirement and the amount of housing benefit/ council tax reduction that you were eligible for may have been decreased. For that reason I think I'd make the most of the NHS pension and then at least you're in control of your future rather than worrying if you made the right decision everytime that there is a new governemnt or budget announced.

Hope you manage to work out a reduction in hours too xx