Should I use pension money to pay credit card?

badgers

Hi

I have been foolish and become indebted to the tune of 16 K to credit cards - all on reasonable rates though of 7 %. I did this to pay through student days (mature student with family so it was expensive).

Anyway, even tho I have a good job now (least something's improved!) I have about 360 quid a month leaving my account and that leaves zero for family hols.

I want to pay off faster and have a little spare cash, so I was thinking of using the £160/month I pay to my firm's pension scheme (average salary) to increase payments and pay off a couple of cards (I have 3).

Is this wise?

bryanb

Is it even possible?

Trajal

Didn't want to read and run, this is a seriously tricky question to answer.

Does your employer match your contributions?

butler_helen

Is it a scheme where you have a "value account" and either pay it to the pension or take it as cash? If so, think really carefully as to whether it impacts your contributions/final salary pension etc.

However I am young (27) and have done this for one year to get funds for maternity leave and for paying a CC. So I see where you are coming from with the idea.

Not really useful advice - sorry!

k3lvc

badgers wrote: »

that leaves zero for family hols.

For me the holidays are a luxury once you've paid everything off - many familys survive and flourish without them

Mikeone

My instinct would be to say no, this is not wise. You'd be using a long-term solution to solve a short-term problem. Ceasing your pension contributions would diminish your pot when it came to retirement, meaning that technically, you'd still be paying off the debt then. Also, if your employer is making contributions, you'll be denying yourself free money!

I'm not going to say you should rule the idea out completely -it's difficult to give precise advice without knowing the figures etc, but I'd certainly explore other repayment options first if I were you. There may be ways to can cut back and save to free up more of your money without raiding your future.

badgers

OK thanks.

I probably need to speak to an expert, but I dont want to spend money there either.

BTW as far as family hols are considered, I defo disagree its a luxury we can do without. Hols are a time for a family to be happy, bond, share memories etc. To go without is not something I think is very sensible for a happy well adjusted family life.... unless its a question of food or hols perhaps

badgers

bryanb wrote: »

Is it even possible?

yes i think so