You may decide to stop any regular payments you make into savings accounts or towards savings or investments, to save money. If you’re putting money aside in a bank or building society account, there’s usually no problem or penalty if you stop saving.
You simply stop your payments, and either leave the savings that have already built up in the account or cash them in. But a few accounts are designed for regular monthly saving over a year or so. You’ll lose some interest on these accounts if you don’t make all the payments.
You may belong to a pension scheme. If this is a scheme at work, contributions to it are usually taken directly from your pay. You can opt out of the scheme, but you will then lose any contributions your employer is making to the scheme for you.
Remember that pension scheme benefits often include life insurance cover and survivor pensions, so check how these would be affected if you stop contributing. Talk to your pension provider or HR department at work.
With a few investments (in particular investment-type life insurance), you agree to save a set amount each month. If you stop, there may be penalty charges that reduce the value of the money you have saved so far. Some policies include a ‘waiver of premium benefit’ that makes your payments for you if you can’t work because of illness.
Be particularly careful of stopping payments to an endowment policy or other investment that is intended to eventually pay off a mortgage. If there isn’t enough money to pay off the mortgage at the end of its term, you may have to sell your home. Consider whether there are other options for reducing your monthly mortgage payments.
If you’re saving for a particular purpose, think carefully about what will happen if you stop. Whatever your goal was, you may have to wait longer for it or may not meet it after all.
Before you stop any regular payments, check the terms and conditions for the savings account or investment. You could also contact the provider to discuss it. Our financial guides can talk to you about your situation and give you information about stopping regular payments.
Thinking about the important issues in this section will help you work out what next steps you need to take, and whether you need further information, support or advice.