Pension or Debts

CandyCupcake

Hey Guys

I need a bit of advice regarding the above. I currently pay into a pension scheme in work - about £60 a month - and I've been paying into it or about 2 years. Im debating cancelling the pension scheme and putting the monthly payments towards debts. Plus I will get the money back ive paid which can also get thrown at a debt in a lump some.

What do you think? Keep paying into the pension or cancel?

Thanks

xx

HappyMJ

Pay high interest debts off first such as credit cards and loans then save into a pension alongside your mortgage. The interest rate you pay on your mortgage should be less the than the returns you should get on your pension contributions.

katsu

The circumstances on which you can "get the money back" are very limited so you need to check very carefully that this is possible. 99% of the time when you pay into a pension that money is not accessible until you reach the age to take the pension.

To decide whether or not to clear debts with the £60 - are you getting employer contributions too? Is your pension also getting tax relief? If so you are getting more than £60 worth of benefits, so unless you are in debt crisis I would stick with the pension and look to save £60 elsewhere. You could also check how much difference it makes to your debt free date and then see how long it would take to save the extra pension contributions to make up for it.

CandyCupcake

Hi happymj & katsu,

I dnt have a mtg unfortunately I still live at home.

Yep I get employer contributions. I pay in 5% and they pay in 9%. We can access everything we can pay in however once we do this we cannot opt back into it once we have opted out. That's why I am rlly torn with what to do

Thanks for ur help guys

xx