Work Place Pension Opt Out

mr_eddy

Anyone else either opted out or thinking of opting out of their WPP ?

I am about to opt out but everyone I speak to says that its the wrong decision - That being said they all earn A LOT more than me, some people seem to not get the concept that for many money is very tight and even a few extra quid can make a real difference.

My argument is simple - I am currently paying £70 a month into my WPP but after all bills/food etc I am left with £50-100 a month to survive on so essentially that is my entertainment / clothing allowance. By having an extra £70 a month it means I can be sure that bank balance at least has a bit of extra in case something crops up or more likely keep chipping off the mortgage debt.

Being mortgage free with no pension is a better option in my eyes than being in my 50's with a pension but also a mortgage.

If I leave it to go into my pension then for me it means:

* Can't get that money back for probably 20+ years
* £70 a month is not really going to make a massive difference - Given I am now 37 years old and have no previous pension.

My Boss says "It will help" but he is on £50k a year and probably pays £500+ a month, I was always lead to believe that to have a worthwhile pension you need to pay in your age as a % when you start so if you start your pension at 18 then pay in 18% etc.

For me £70 extra a month is more useful for me especially with uncertain times ahead (read Brexit / no deal scenario and inevitable food price increases etc as a result).

Anyone else in the same boat.

Obviously the ultimate goal is a better paying job for now WPP is just not for me.

chris_bass

bear in mind that you won't actually get £70, it'll be £70 less tax.

And £70 a month now is different to £70 a month after 30 years of investments. It should in theory be worth a lot more after that time.

It is up to you but have you seen how much state pensions pay out these days? make sure you have something in place for when you retire.

fenix

State Pension doesn't start until you're what - 67 ? So that is a lot of years working.

Anything you put in now will help in the future - I'd look at what costs you have - see what you're spending on and see if there is anything you could cut down on.

Seeing as you say you have no previous pension then it's even more reason to continue paying in.

surrey_commuter

does your employer match what you are paying in?

mercia_man

As a pensioner now, I am so glad I was persuaded by an older and wiser colleague to pay the maximum amount into my work pension when I was in my 20s, even though it was a financial struggle. I would be on the breadline now if I had to survive on solely the state pension. Instead, my wife and I now receive more in pension than we did in our relatively low pay jobs.

Remember that your employer and the Government both contribute to your WPP. Seems daft to reject that free money.

kingstongraham

Does the company contribute as well? If so, then what they pay in is free money, albeit free money you can't touch for 40 years. If you don't pay in, you are giving up their contributions as well, so likely more than £70.

mercia_man

Employers are obliged to make a contribution to WPP while the Government gives tax relief on your contributions. This will add up to quite a sum when the time comes to retire.

dinyull

I get the obsession with being mortgage free - it's the dream for most - but it's easy to forget it's the cheapest money you'll ever borrow.

Like someone else said, it won't be £70 after tax etc. And the thing I'd worry about is then relying on that extra money and not taking it back up.

Is there nowhere else you can cut cloth?

keef66

I now pay in as much as is required to maximise the company's contribution. It's free money, even if I can't get to it till I retire, and as a Yorkshireman I can't turn down free money.

Very early in my working life when I left my first employer I stupidly took the chance to have my pension payments refunded. I'm seriously regretting that now because those early contributions would've been worth quite a lot by now...

pblakeney

Biggest question is this. If you do not pay into a pension now, then what will you live on in retirement? Please, do not say the State pension.

mouth

Leave it in. Getting a second job is a better way forward. A friend of mine used to make about £80/month (going back over 10 years) delivering free newspapers Deliveroo, Uber eats, local pizza places etc are all stacked with 2nd earners who need 10 hours a week to get by. This in turn covered his council tax and a couple of other small expenses throughout the year.

I'm also 37, and didn't start a pension until I had a job in the local education authority, was made redundant after 18 months or so and I was shocked by how much it will be worth come retirement for such little contribution. My current employer basically matches what I put in so its well worth keeping on and finding another way to break even.

robert88

Another vote to stay in here. I don't see pension saving getting easier in years to come so I think you'd regret it if you left now. My priority is first pension provision first, paying off the mortgage was a bonus. We've lived in the same place for years (we like it!) so the mortgage had shrunk relative to everything else.

darkhairedlord

When you come back on here in 40 years time moaning about everyone else's gold plated pensions may I be the first to tell you to ffffff off.

Matthewfalle

Stay in.

As above, it’s not £70, it’s whatever it is afte tax.

It won’t be going into the bank account as a buffer - you’ll spend it on your booze and clothes fund and not even notice it after. A month. Then you’ll look back after 3 years and kick yourself for doing exactly that.

Trust MF - he’s been there and done it and regretted it for the past 15 years.

darkhairedlord

You've got thirty years to go, your mortgage will fall in real terms over that time and you will be mortgage free with a pension. Jeez, I wish I had entertainment money at the end of the month... you

rolf_f

mr_eddy wrote:

Anyone else either opted out or thinking of opting out of their WPP ?

So, in summary; no!