Should I stop paying in to my pension while I clear my overdraft?

Penny_Pinch_3

Hiya all. This is my first post, I hope it's in the right place! I work in education and I have a local authority pension which I pay into every month - £91 which is about 9% of my income - and which I know almost nothing about. I also have an overdraft of about £1000 which I have just transferred to egg for a few months 0% interest. You can see i don't have the worst debt problem ever but I hate paying that interest to the bank. Do you think it's worth stopping my pensions payments for 9 months to pay off my overdraft?

johnbfan

I don't know much about pension funds but what I would do is find out from the pension people what effect it would have if you put the pension on hold before doing this.

I work for local government myself and took two lots of maternity leave. The last was 16 years ago. Today is my 30th anniversary working for them. so hope that the time served will make up for the time on maternity leave. It may be you have plenty of years left that you can pay in enough to compensate for the stopping payments.

With the way state pensions are going now adays it might be you have to rely on the works pension more than you realise.

RAS

i am in a similiar pension scheme.

If you take a pensions holiday, does that mean that your employer stops paying to?

Mine pay a higher percentage of my salary than i do into the pension fund. If I lost their contributions as well as mine, the cost of not paying £900 would be about £1100 in lost employer contributions. A lot more than the cost of interest on a small overdraft.

lynzpower

Penny_Pinch wrote: »

Hiya all. This is my first post, I hope it's in the right place! I work in education and I have a local authority pension which I pay into every month - £91 which is about 9% of my income - and which I know almost nothing about. I also have an overdraft of about £1000 which I have just transferred to egg for a few months 0% interest. You can see i don't have the worst debt problem ever but I hate paying that interest to the bank. Do you think it's worth stopping my pensions payments for 9 months to pay off my overdraft?

but you re not paying interest to the bank if its at 0%?

I would keep on with the pension.

1000 isnt a great deal- have you looked at your SOA to see if theres anywhere you can cut back to find the 1k to pay your egg balance off quicker

Dithering_Dad

Didn't we already cover this here:

http://forums.moneysavingexpert.com/showthread.html?t=430621


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