Yikes! I'm making the call tomorrow
Comments
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All of the below is subject to what the pension and scheme rules are but...
Not many company pension schemes allow you to take your pension a) early at all (ignoring health situations), or b) early without significant reduction in the pension itself.
You mention a couple/few pensions, defined benefit (final salary), defined contribution, and AVCs.
You need to find the rules for the three.
The normal pension age for the three.
What are the sizes of pots for the DC and AVC pots?
For the DC and the AVC is it possible to transfer those to another provider.
This last bit may allow flexibility if you cannot commence your pension until normal retirement age (perhaps 65). If you are desperate to withdraw capital from your pension(s) early, by transferring the DC and/or AVC, or part of it, to a SIPP you could access the money at age 55 (currently).
As others have said you need to find out and provide much, much more information.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
If this is a FS/DB schheme i dont think you can aces the TFLS early. You might on the AVCs.
So really you need to overpay the CCs if you want out of debt, but if they are 0% it might mean you are better off overpaying but from income
Or you could get the cash your dead beat dad owes you. Use that to pay off the CCs you ran up raising his kids.0 -
I'd say take a deep breath and don't make any rushed decisions. Your thread title and first post smack of panic and there is no need to panic.
I can see why you want to pay off the credit card debt, just because CC debt "doesn't feel good" It's a strange thing, but when you think about it, debt is debt. The negatives about CC debt are really (IMO) because of the assumptions about how it was built up, i.e., on frivolous toys, holidays, etc., whereas of course a house is a respectable thing to buy. Also, CC debt is usually at a higher interest rate.
Forget those preconceptions and ask yourself why it is so important to pay off the CC debt and whether it justifies drawing from your pension before you retire.
Whether or not your work scheme rules allow an early withdrawal, I'd say leave the pension where it is, and just focus on paying off the CC debt. It's 0% (at the moment), so it isn't costing you anything, whereas the £15k in your pension is earning you money. Simple maths says leave it where it is.(Nearly) dunroving0 -
I'd say take a deep breath and don't make any rushed decisions. Your thread title and first post smack of panic and there is no need to panic.
I can see why you want to pay off the credit card debt, just because CC debt "doesn't feel good" It's a strange thing, but when you think about it, debt is debt. The negatives about CC debt are really (IMO) because of the assumptions about how it was built up, i.e., on frivolous toys, holidays, etc., whereas of course a house is a respectable thing to buy. Also, CC debt is usually at a higher interest rate.
Forget those preconceptions and ask yourself why it is so important to pay off the CC debt and whether it justifies drawing from your pension before you retire.
Whether or not your work scheme rules allow an early withdrawal, I'd say leave the pension where it is, and just focus on paying off the CC debt. It's 0% (at the moment), so it isn't costing you anything, whereas the £15k in your pension is earning you money. Simple maths says leave it where it is.
+1 to that. Leave the pension alone unless there is a dire emergency.
Based on the amounts and timescales why not clear the CC debt and make the most of the 0% deals, then switch to overpaying the mortgage. It looks like you could pay a lot of it down and then clear the rest with the PCLS well before it ends (assuming you can take PCLS at 65).
Is the credit card debt likely to go up again, or is that a one-time thing?0 -
As others have said you need to slow down and fully consider all your options and the future implications of each. From what you have said there is no real time pressure in this case.
Make that phone call to HR by all means but instead of telling them that you want to access you pension early take the opportunity to request full information about all the pension benefits that you have so far accrued. Ask for details and statements for each part of the scheme. When you have all this information take the time (months probably) to fully digest and understand it and then research your options using resources such as this forum and many other freely available sources of information. Knowledge and understanding is vital. A snap decision now could have long lasting effects on your future income and standard of living.0 -
What interest rate is your mortgage on, and is it fixed or variable?
Things to consider while paying off the cc / getting info on your pensions would be:
Can you reduce the interest rate on the mortgage?
Alternatively could you fix the rate, say with a five or ten year fix, to protect you from possible future interest rate increases?0 -
Deep breath. Thank you to all of you who have read my post and replied. So, I rang HR this morning. I had a bit of a wobbly, because they could only find my current pension, apparently my 15 years working for the firm before it was taken over disappeared!
Anyway, this is what I found out. I have earned approx £35,000 in one pension, so if I wanted to, and having looked at your replies I may not want to now, but if I did, I could take out 25%, which is about half of what I want to pay off. I asked,and I can do that.
Eventually, after ages, I was given a number to call about my pension from the firm I worked for that was taken over. It was a very strange call, but this bloke said he would try to get my details posted to me before christmas. This is my final salary pension details, so I'll have to see what is going on with that when I get the details.
Thank you all, I still think I want to pay off my debts with this money! If I don't, I feel it will be around me forever. And my mortgage is bothering me. Yes, my ex has a lovely mortgage free house with his new wife and stuff, but it has only ever been me paying my way, I'm sick of being in debt, I want to get rid of it! I just see this as being my only way out. Unless I win the lottery, or meet a rich (blind) man.0 -
LHW99, |I just got my mortgage thing through today, I am paying 3.00% interest on my mortgage. I wouldn't want to mess with this, I can pay it down if I want, which I intend to do. Thank you for your reply x0
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Or you could get the cash your dead beat dad owes you. Use that to pay off the CCs you ran up raising his kids.
thank you to whoever put that, I love you :j:T:rotfl:0 -
Sounds to me like you are seriously heading in the wrong direction. I suspect you have a spending problem, not so much a debt problem. And these are 0% CCs, so you have an irrational issue with low-cost debt that you are thinking of hazarding your future self's welfare in retirement.I earn £3019 per month before tax
Your CC debts are less than half your annual earnings. IMO you shouldn't even think of screwing with your pensions for that debt.
OK so you are paying 3% on £60k = £1800 on the mortgage in interest and £6k to the CCs. If they are really 0% and can stay 0% then that 6k is going towards the debt on the CCs not the interest.
You have a net income of ~28k and you are allocating £7800 to servicing debt, and if you have no spare you are spending £20k on the rest of life. In your ideal retirement you will have no mortgage and no CC debt. Your net pension therefore needs to cover your £20k of spending. You are not a very long distance away from reaching retirement age anyway, and £35k DC will give you an income of ~£1700 p.a. so your DB pension must give you the remaining £18k plus enough to pay your basic rate tax. Unless you will be retiring at state pension age, the DB pension then only needs to be ~ £12k (you will pay tax on the pension but no NI)
If it's not that much you need to reduce your spending otherwise you will be short in retirement. I venture it is your spending, not your debts, that are at issue.
Mortgage rates are low at the moment. It is insane to be paying down a mortgage when you could be increasing payments into a pension with the intention of paying the mortgage off with the pension PCLS, effectively paying off the mortgage from gross earnings rather than net.
I was hung up on having a mortgage when work got crap and I wanted to retire early. Paying it off was a stupid move for me, I should have carried it, paid what I was paying down the capital with into my SIPP and pay off the mortgage with the PCLS. Sinking that capital into the mortgage while I was working constrained what I could do with retiring early. Yes having a mortgage free house feels good, but nowhere near as good as having a boss-free life and a good plan to pay the mortgage with the help of HMRC. I was more skint in the early years of retirement than necessary due to that tactical error. Don't pay off your mortgage early unless you are rolling in cash - washing that through your pension gives you a good lift when interest rates are low.0
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