Phased Retiremen

jamesd

I'm sorry, I didn't see your signature that described the unsecured debt. Given that you're in an arrangement, you would have difficulty getting decent credit card or personal loan interest rates so that probably eliminate them from consideration and leaves equity release.

Good job on getting the unsecured borrowing at 0%! Because there is no interest cost you should just stick to the agreed payment plan on this, not try to pay it off any faster. Better to use any extra money to save up for earlier retirement.

Once you've saved up some money you could make offers to settle some of the debts at less than 100%. Maybe start by offering 50% to one and see if that one bites, then move on to the next if not. Once you've gone through them all and if none bites, wait a few months and start again at 75%. Normally we'd write about partial settlement having a negative effect but that's irrelevant for you because you're unlikely to be taking out any new unsecured borrowing. Some lenders may prefer more money sooner and accept a capital loss of some amount. Others won't. Just depends on the lender. Because of the big potential gain, saving money to make these settlement offers is one of the best ways to use your money, beating things like overpaying on a mortgage or directly overpaying on the debts.

Use some caution with advice, particularly debt-related advice. Specialists like that tend to look at only one aspect of your planning, not all of the picture, notably your earlier retirement objective.

For the FSAVC if you can't move it to the main scheme you'll probably have the option to take it all as a lump sum, 25% tax free, 75% taxable income. if that isn't offered at work then a transfer to another pension place would get you that option. I'm wondering how big this FSAVC is? That's because it's a potential source of some capital that you could use to make partial settlement offers sooner.

Historybuff

The amount in the FAVC is only around £4500. I hadn't been paying in long before I realised it was not for me. I'll contact them next week to find out what my options are.