Start a Pension or pay of debt?

Reason123

Hey guys

I have now been at my employer for over a year so i can join they're pension scheme.

But should I?

I am 28yr earning 31.5k and have debt of 15k.

Should I join the 5%/5% or use the £100 id lose to pay towards the debt?

What is most important at my age?

Cheers

Ilya_Ilyich

What is the interest rate on your debt?

CLAPTON

what does 5%/5% mean?

webnibbler

Could you manage both? If you haven't already - review your spending in detail. Find out exactly where your pay packet goes every month. It's amazing how those small monthly costs add up over the year. Cutting your spending is in effect a pay rise and will allow you to invest.

EclipsedMind

CLAPTON wrote: »

what does 5%/5% mean?

I would guess the op is saying its an employer matched contribution so he puts in 5% and his employer puts in 5%. So free money.

webnibbler

5% is pretty good these days, my employer contributes zip . Not much chance of that changing anytime soon either with the government fumbling over NEST.

atush

I am with the advice in post 4.

In the last year, when you were not in the pension how much debt did you pay off? You need to join the pension, but you also need to py off that debt ASAP. Throwing away matching contribs isn't the way to do it, but cutting your spending down, selling what you do not use, taking an extra part time job- take in a lodger. You are probably wasting money on things you dont' really need from an expensive mobile tariff, to overpaying on utulities/insurance, takouts, ready meals, pints down the pub/going out, poncy coffees, magazines and gym subscriptions.

So get yourself to the debt free board and post your SOA and the good folks there will have no probs helping you cut down spending and you can throw that at the debt.

And join that pension, even if you start at 3%/3%.

CLAPTON

EclipsedMind wrote: »

I would guess the op is saying its an employer matched contribution so he puts in 5% and his employer puts in 5%. So free money.

possibly/even probably but the answer depends critically on what it means; never speculate when you can know.

laughingboy

CLAPTON wrote: »

possibly/even probably but the answer depends critically on what it means; never speculate when you can know.

jesus wept its quite clear he means 5% matching

did you notice in the OP he says his debt is "15k" 15k what - I would assume £ but obviously I shouldn't be making such wild assumptions. Is it 15k bananas OP?

webnibbler

atush wrote: »

You are probably wasting money on things you dont' really need from an expensive mobile tariff, to overpaying on utulities/insurance, takouts, ready meals, pints down the pub/going out, poncy coffees, magazines and gym subscriptions.

The guys I work with laugh at my 'not-so-smart' mobile. I laugh too thinking about the £500 in the year they've shelled out for the latest iPhone that I'll be tucking away in some shares in April .

CLAPTON

laughingboy wrote: »

jesus wept its quite clear he means 5% matching

did you notice in the OP he says his debt is "15k" 15k what - I would assume £ but obviously I shouldn't be making such wild assumptions. Is it 15k bananas OP?

I respect your greater wisdom but maybe you could express it in a more moderate manner