Pension or clear debts?

littlemidwife

Hi everyone , I'm a newbie so please be gentle! Basically my worry is I have about £18000 of debt from my student days :eek: . I have now been working for the NHS for 2 years and pay 6% of my salary towards an NHS pension, which is topped up by 6.5% by the NHS. Should I stop paying into my pension temporaily, or even permenantly in order to clear my debts? They are really scaring me now and I would like to save some money for an investment house with my fiance (who already owns 3 properties outright himself). Also, if I chose to stop paying into my pension can I get back the money I've already paid in? I'm not sure if I intend to work for the NHS forever and am considering going back to uni to retrain, but would prefer to be out of debt first.

Sorry if this is confusing, but any help would be very gratefully received!
Thankyou,
Anna

dunstonh

You need to look at your priorities which appear to be (in no order)

1 - clear debt
2 - paying into one of the best pensions there is
3 - enter into a high risk investment property investment

If you are concerned about £18k of debt then you are going to be really bad if you go into mortgaged buy to let properties. Is the debt reducing? Can you adjust your lifestyle to clear the debt quicker?

As for the NHS scheme, no you cannot get you money back out of it and leaving it should be a last resort as its such a good scheme. Its worth far more than you pay into it. Far more than any investment property.

littlemidwife

Thanks for quick reply! I currently pay 70% of my income into debts and live off very little money every month. I don't pay rent as I live with fiance in his house, pay minimal bills. If I did buy a house it would be with a 50% deposit from OH and I would pay mortgage on remainder-hopefully funded by rent! I was thinking that an extra £150 per month on debts would be a major help.

nesssie1702

The NHS superannuation scheme is one of the best going - as well as the money that you pay in each month, your employer tops up your pension too and there will also be some element of life cover should anything unforeseen happen to you.

dunstonh

It wouldnt be £150 you get by not paying into the pension though. You would have to deduct tax relief and your NI contributions would do up as well.

If you bought a investment property with a mortgage then that is a high risk transaction and will increase your debt. You shouldnt be considering entering into a high risk investment contract when you have debts which are taking the majority of your income.

Your partner would be better off making sure you can pay the pension as that is better financially than the investment properties.