Work Place Pension Opt Out

mr_eddy
mr_eddy Posts: 830
edited August 2018 in The cake stop
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.

Comments

  • chris_bass
    chris_bass Posts: 4,913
    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.
    www.conjunctivitis.com - a site for sore eyes
  • fenix
    fenix Posts: 5,437
    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
    surrey_commuter Posts: 18,866
    does your employer match what you are paying in?
  • mercia_man
    mercia_man Posts: 1,431
    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
    kingstongraham Posts: 26,208
    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
    mercia_man Posts: 1,431
    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
    dinyull Posts: 2,979
    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
    keef66 Posts: 13,123
    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
    pblakeney Posts: 25,722
    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.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • mouth
    mouth Posts: 1,195
    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.
    The only disability in life is a poor attitude.
  • robert88
    robert88 Posts: 2,696
    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
    darkhairedlord Posts: 7,180
    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
    Matthewfalle Posts: 17,380
    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.
    Postby team47b » Sun Jun 28, 2015 11:53 am

    De Sisti wrote:
    This is one of the silliest threads I've come across. :lol:

    Recognition at last Matthew, well done!, a justified honour :D
    smithy21 wrote:

    He's right you know.
  • darkhairedlord
    darkhairedlord Posts: 7,180
    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
    rolf_f Posts: 16,015
    mr_eddy wrote:
    Anyone else either opted out or thinking of opting out of their WPP ?

    So, in summary; no!
    Faster than a tent.......

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