Early Pension Pot

Soad

I was thinking about taking my pension pot from the company (I am 55) I think its worth about 25k


Would it make more sense to clear the more than 25k debts I have on credit cards and loans with the 25k or leave it until I retire?


Thanks

PeacefulWaters

What, precisely, do you mean by "pension pot"?

Soad

25% tax free lump sum

Drp8713

Soad wrote: »

I was thinking about taking my pension pot from the company (I am 55) I think its worth about 25k


Would it make more sense to clear the more than 25k debts I have on credit cards and loans with the 25k or leave it until I retire?


Thanks

If your pot is worth 25k then you can only take 25% of it as a lump sum.

Also if your debt is 25k and you paid all of your 25k pension to pay it off, how could you afford to retire at all?

Soad

Sorry I should have been more clearer, my pension is a lot higher and I stand to get 25k as the lump sum if I took this payment at 55 (thats what our pension guy told me)

Thanks

CLAPTON

Soad wrote: »

I was thinking about taking my pension pot from the company (I am 55) I think its worth about 25k


Would it make more sense to clear the more than 25k debts I have on credit cards and loans with the 25k or leave it until I retire?


Thanks

depends upon your income, spending, family circumstances, other pensions provision, why you have 25k of debts etc.

tell_it_how_it_is

If it was me, and I was coping okay paying off my existing debts, I'd carry on as was and leave the pension pot to grow as much and long as possible (while at the same time looking into how to best tackle clearing the debts and, ideally, contributing to the pension).

If it was a real struggle month to month, then perhaps it has to be considered, but you'd need to sit down and look into the longer term, and decide how much this significantly reduced pension would affect you into retirement.

As Clapton mentions, you need to look at the bigger picture and put some detailed thought into it really.

kidmugsy

If you cleared the debts, could you trust yourself to use the income liberated to restore your pension situation?

atush

CLAPTON wrote: »

depends upon your income, spending, family circumstances, other pensions provision, why you have 25k of debts etc.

If at 55 you are carrying 25K of non mtg debt, you have to keep working for a long time to build up savings and to make sure you take on no more debt?