Paying off Debt vs Work Save Scheme

matt4504

Hey everyone,

Just wondering if anyone has any advice. Here's a quick SOA....

Savings = £0
Credit Card Debt = £3750 @ 21.9%
Overdraft = £1000 @ 0%
Current Account = £130
Salary = £530 (Minimum but usually more each month with overtime)

I know that I'm pretty skint but I've paid every bill so the £130 is post that...

Anyway, I've been paying off my credit card fairly quickly through using any spare cash to make overpayments on top of my minimum DD payment. I think I should be able to get rid of it by July.

My main question is I receive a yearly bonus each year around April time which I can either take and pay tax on (I have earned over the tax free allowance) or I can save it in a work save scheme where I have to wait 3-5 years but can take it tax free/receive a yearly interest payment).

I know that the general advice is to pay off debt and don't save but if I lose 20% on tax and 11% (not exact numbers I know) on my bonus is there any negatives to saving this?

Sorry if this thread sounds a bit confusing....

GeorgeUK

Would you be able to get a 0% credit card? You may be able to continue to pay down the debt at the current rate and still take advantage of the work scheme.

Personally i would get rid of the debt as the APR is quite high, but that's more a gut feeling than looking at the figures.

Poostix

Well the works share save scheme is giving you around 26% profit before you see the cash, so much better than the interest payments on the debt?

Invest in the share save scheme and cope with paying down the debts yourself. as long as your managing now you won't feel it and if the company is doing well then the profits will boost the amount that they are giving you.

Its a no brainer to me. like the 500 now or 1000 in 2 years time question. take the most you can get even if it means waiting a little for it.