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Suspending pension

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  • 15-05-2020 2:28pm
    #1
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭


    Is suspending the same as putting Ur pension on a holiday ?
    I recently suspended mine for 3 months but I think I may need to do a few more months continuation

    Is this a bad thing that will effect my pension or can I just add on at a later date is go past my retirement age and pay in for another year

    My pension has 8 years left

    Thanks for advice


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    #2
    coylemj
    Registered Users Posts: 25,355 ✭✭✭✭coylemj


    If you stop making an employee contribution to your occupational pension, you may lose the corresponding employer contribution which would be money lost that you can never recoup. If it's a private pension or AVC, you can stop making payments for a while, it's no big deal other than that you would have more in the pot had you continued to make the contributions.

    Share prices are currently low after the crash caused by the economic fallout from the virus so effectively there's excellent value out there if you exclude shares in airlines. Taking a holiday now would probably be a bad idea because your contributions would be buying shares that will definitely have bounced back before you retire.


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    #3
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,641 Mod ✭✭✭✭Henry Ford III


    coylemj wrote: »
    If you stop making an employee contribution to your occupational pension, you may lose the corresponding employer contribution which would be money lost that you can never recoup. If it's a private pension or AVC, you can stop making payments for a while, it's no big deal other than that you would have more in the pot had you continued to make the contributions.

    Share prices are currently low after the crash caused by the economic fallout from the virus so effectively there's excellent value out there if you exclude shares in airlines. Taking a holiday now would probably be a bad idea because your contributions would be buying shares that will definitely have bounced back before you retire.

    You may lose employer contributions, and you may not. It depends on the rules.

    Airline shares may be good value too. Who knows?


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    #4
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭torrevieja


    it is a private pension i stopped it for 3 months next payment in july


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    #5
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,641 Mod ✭✭✭✭Henry Ford III


    torrevieja wrote: »
    it is a private pension i stopped it for 3 months next payment in july

    Pay the premiums if you can. Units are likely be relatively "cheap" currently.


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    #6
    Darc19
    Registered Users Posts: 3,817 ✭✭✭Darc19


    torrevieja wrote: »
    it is a private pension i stopped it for 3 months next payment in july

    No issues whatsoever. Simply send them another letter asking for contributions to be suspended until further notice.

    All it means is that the fund will be slightly lower at retirement - in reality I find many people have been sold too high a pension as expense after retirement falls and many never take into account any inheritance that will come to them.

    So I suspect that the net affects will be minimal


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    #7
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭torrevieja


    Darc19 wrote: »
    No issues whatsoever. Simply send them another letter asking for contributions to be suspended until further notice.

    All it means is that the fund will be slightly lower at retirement - in reality I find many people have been sold too high a pension as expense after retirement falls and many never take into account any inheritance that will come to them.

    So I suspect that the net affects will be minimal

    Thanks Darc, i appreciate ur answer and i think i have been sold too high a pension its gonna be over 600 a month just bit crippling at moment


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    #8
    coylemj
    Registered Users Posts: 25,355 ✭✭✭✭coylemj


    torrevieja wrote: »
    Thanks Darc, i appreciate ur answer and i think i have been sold too high a pension its gonna be over 600 a month just bit crippling at moment

    Why not just reduce your monthly contributions? It's not a binary, you don't have to put in that much every month or nothing at all.


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    #9
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭torrevieja


    I'm paying 540 would 100 be acceptable till I get sorted
    I appreciate ur views


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    #10
    coylemj
    Registered Users Posts: 25,355 ✭✭✭✭coylemj


    torrevieja wrote: »
    I'm paying 540 would 100 be acceptable till I get sorted

    The appropriate word would be 'advisable' rather than 'acceptable' but it's impossible to give you a number because it all depends on where you are in terms of age and career and how much you have already accumulated relative to your current annual salary.

    What I'd advise you to do is not to stop making contribution altogether because then it will be more painful to resume - when you have more disposable income, your spending patterns typically adjust upwards. So keep making some contribution because it's harder to come back from zero. How much is down to you.


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    #11
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭torrevieja


    coylemj wrote: »
    The appropriate word would be 'advisable' rather than 'acceptable' but it's impossible to give you a number because it all depends on where you are in terms of age and career and how much you have already accumulated relative to your current annual salary.

    What I'd advise you to do is not to stop making contribution altogether because then it will be more painful to resume - when you have more disposable income, your spending patterns typically adjust upwards. So keep making some contribution because it's harder to come back from zero. How much is down to you.

    thanks Coylemj, im 57 and self employed and thanks for your advice


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    #12
    Planet X
    Moderators, Recreation & Hobbies Moderators Posts: 3,929 Mod ✭✭✭✭Planet X


    You can suspend your payments anytime.......I did for the last two months but resumed yesterday. There is no issue with this. Private pension also.
    You're not tied to anything or any payment schedule. Notification to your Financial Advisor is all that is required in writing (email). They pass it on to the pension company/provider.

    Have done it regularly over the years with kids 3rd level fees on my head.


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    #13
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,641 Mod ✭✭✭✭Henry Ford III


    Planet X wrote: »
    You can suspend your payments anytime.......I did for the last two months but resumed yesterday. There is no issue with this. Private pension also.
    You're not tied to anything or any payment schedule. Notification to your Financial Advisor is all that is required in writing (email). They pass it on to the pension company/provider.

    Have done it regularly over the years with kids 3rd level fees on my head.

    That's not entirely accurate.

    Some old pension contracts such as with profits and deferred annuity policies didn't allow premiums to be suspended. You either paid them or they were made paid up.

    They were available into the early 1990s so are reaching maturity and becoming rarer now.


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    #14
    micar
    Registered Users Posts: 1,877 ✭✭✭micar


    You have 2 options

    1) premium holiday: Generally for periods up to 1 year. However, it is your responsibility to inform the company when you wish to start repaying the premium. If you don't, the policy will remain in a premium holiday status.

    2) paid up: this is when you wish to stop paying premiums altogether. However, you can at some point (can be years into the future) contact the company to say you wish to recommence paying premiums.

    A policy on long term premium holiday is really just the same as a policy which is paid up.


    As the poster above said, the exception to this are those deferred annuity policies.


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    #15
    torrevieja
    Registered Users Posts: 1,659 ✭✭✭torrevieja


    Planet X wrote: »
    You can suspend your payments anytime.......I did for the last two months but resumed yesterday. There is no issue with this. Private pension also.
    You're not tied to anything or any payment schedule. Notification to your Financial Advisor is all that is required in writing (email). They pass it on to the pension company/provider.

    Have done it regularly over the years with kids 3rd level fees on my head.

    Notification to my Financial Advisor he would try to talk me out of it soi just dealt with the pension company myself :rolleyes:


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