Do you pay into a pension?

A question about : Do you pay into a pension?

I have to make a decision and would like some help. If I pause paying into my pension scheme I will move my debt free date from August 2014 to June 2014. But my pension scheme is pretty good, and I'm nervous about stopping paying as it doesn't make a huge difference. I also have no option of making up the difference at a later date.

I'm still in my 20s (just) and so won't be needing my pension any time soon.

So, do you pay into a pension, or do you think a pension is more like a savings thing and should be paid when you are debt free?

Best answers:

• I pay into two pensions, my teaching pension and my pension from my previous job, we aren't high earners at all, but it would take a hell of a lot for me to pause my pension contributions. I personally would rather be worse off now and more financially secure in my old age.
• Well I'm late 30s and have no pension it worries me a lot but I just never seem to be able to afford to join. I don't know where to start to resolve this problem.
• I kept up my pension contributions. The compounding effect over time does make it difficult to make up what you would dhave earned, even if you contribute more later. I could have knocked several months off my debt free date if I'd paused but that wasn't enough to be worth it in my eyes.
• I know exactly what you mean as I remember asking this question to myself 'many' years ago in that I saw it as a loss of a lot of money (although I wasn't in debt then).
  I now pay into a workplace pension and have done so for the past 9.5 years and I am pleased to say I am happy about this given the current climate and no doubt working until I am 70!!
  It is taken at source so I don't see it go and allow for my income as it says on the bottom right of the payslip! As others have also mentioned its important for the long term as once you stop paying that's it...you would then need to make up the difference or get less overall! I appreciate this is really hard to think of when you are young but trust me...time flies!!
  My husband has added - he sees people on a daily basis (with his job - ambulance service) and adds those that have an employment pension have a better well being than those that do not.
• I am still paying into my work pension and my advise would be to do the same. If you paused paying in you would forego your employers contributions, and like has already been mentioned you miss out on the compounding effect of having your money in there for longer.
• I believe you can either have it Hard then Easy - pay in now, and have money in retirement, or Easy then Hard spend the money now and live in poverty in retirement.
• My worry for stopping pension for something like this is that a) you might not end up using all the cash for debt and b) you may not ever begin paying into pension again. Obviously this depends on the person but I view it in the same area as consolidation loans. Even if the person has every good intention, life sometimes has other plans for your money when its available!
• For the sake of 2 months, I really, really wouldnt bother to stop paying. Just keep your pension going.
  I pay into a Work based pension. It stopped when I left my old job (i was paying in 1%, my employer paid in 5%!) and I havent been making any payments to it (since December 2012). I have just been enrolled into my works pension (they one they've started) and I pay in 1% and they pay in 1%. I will be adding my existing pension to my current one shortly so that I should hopefully get a decent return. I started the original one in my mid to late 20's and I am now approaching mid 30's. It's only worth around Ј7k I think at the moment, but I am looking at other ways to have a nest egg later on in life once I am debt free.
• I have paid into a pension for 14 years... I pay 5% of my salary.. Pre tax.. And my company matches it. I am 38 now.
• I understand this change makes a big difference to the DFD but many work place pensions do not let you leave and then rejoin within a couple of months as the huge amounts of paperwork necessary mean they will not process it for you. Good luck though
• It's pointless paying onto a pension... the interest rate is too low to see any meaningful return on your investments (has been for years).
  We're all sleepwalking into a pension nightmare.
• I pay in just under 10% and my employer matches it
• I pay in 12% and my employer adds in another 9%.
  I think you'd be foolish to knock only 2 months off your DFD. Once you're out it will take a lot of willpower to go back in, plus you lose those employer contributions so just stick with it.
  I do genuinely feel sorry for those not able to make the sacrifices required to pay into a pension whilst they are working, they will be the ones living in poverty when they are older and need the home comforts more than ever.
• Yes, I have had mine for 5 years, since I was 27 and employed in the NHS.
  While I could do with the money now to help clear my debt it is really, really important to save for the future...that money could easily be swallowed up elsewhere.
  Like you, I have thought many times about whether to stop paying in for a while but every time have continued paying.
• Given how young you are now every Ј you pay in at such an early age will have benefited from a huge compund interest multiplyier by the time you use it.
  I think the common example given is Person A pays in Ј200 per month for a pension from age 20 to age 30 then stops completely, Person B delays their pension until age 30 then pays in Ј200 per month for the entire rest of their working life till age 65.
  Person A still has the bigger pension come age 65.
  The fact you are in your 20s is a very very strong argument to keep up the pension payments, especially as the DFD basically won't change by more than a handful of weeks.
  Oh to answer the question yes I do -> 15% of pre-tax salary into a 1/35ths final salary scheme for the last 10 years since I was 23 (paying in the maximum possible as I'm particularly paranoid it'll close at some point)