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I am soon going to start a postdoc in UK. I observed that, if you do not intentionally opt out, you will be by default paying a certain amount from your salary towards pension. Of course, paying towards pension scheme is a good thing for your post-retirement age. But for me, I am not sure even if I will stay in UK forever. Postdoc is obviously a temporary job and you never know whether you will settle for ever in your work country, when you are a foriegn citizen. Under such conditions, it seems irrational to spend towards securing a pension in a foreign country. But still, can someone tell me a reason to not opt out the pension scheme? Can opting out pension scheme cost you more tax and lesser take-home salary than opting in? As much as I know, one cannot claim back the money spent towards pension, if one later decides to leave the country and go to other countries for work .

  • I am not sure this site is good for the question. Maybe even really bad! – user111388 Feb 9 at 23:16
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    The question is complex and requires professional advice. It may be more than a question of taxes. Some vested pensions are good, even for short term work, and perhaps even for foreigners. Ask a professional. – Buffy Feb 9 at 23:22
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    There is also money.stackexchange.com. – Nate Eldredge Feb 9 at 23:24
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    expatriates.stackexchange.com might be the best option for this – JiK Feb 9 at 23:43
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    I’ll try to come up with an answer after some thought. I was in a similar situation 30 years ago and have some pension rights in a foreign country from my post doc. – Jon Custer Feb 10 at 1:07
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But still, can someone tell me a reason to not opt out the pension scheme?

Because you are likely to get more out of it (at old age) than you pay into it (now) — and even if you don't, it may be safer for you to put away money in a way you cannot (easily) access until you no longer have direct income from work.

Both you and your employer are opting into the pension scheme. Despite recent threats, it is still a defined benefit scheme. If you and your employer have paid into the pension scheme for x years, you will get money out of it after you reach the retirement age, regardless of where you live.

Depending on where your next (long term) job is, your (next) pension scheme may have agreements which might allow you to transfer the money paid into your UK pension scheme to your next pension scheme. Consult a professional.

I have pension savings from temporary (academic) positions in Sweden, Canada, the UK, and Germany. Once I'm fairly certain to remain in the same country until retirement, I will consult with a professional for advise on whether it is possible and wise to pool them all together into the fund of the country where I will then live.

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  • That is the key point. You don't need to live in the country to receive the pension benefits. How easy it is to transfer these between countries and whether it is wise to do so it a complicated matter but in general the money you put into a pension scheme is not lost, no matter where you will live during retirement. – quarague Feb 10 at 9:32
  • The "standard" postdoc pension scheme, teachers pension, is not transferable. There are, however, other pension schemes that are transferable to different countries, but you need to explicitly switch. What gerrit means by "both you and your employer are opting in" is that the employer will match whatever you pay in there, so by opting out you "lose" your employers contribution. Also please note that this is different from UK state pension to which you may also qualify in part if you had worked in the UK. – penelope Feb 10 at 13:52
  • @penelope Well, there is something I am not aware of (not transferable) and may not find out until the time comes that I do want to switch. We did have information meetings about this but it was only about transfering to, not transfering from the UK pension. Pensions are complicated. – gerrit Feb 10 at 13:55

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