Debts vs pension

greensalad

andyfromotley wrote: »

He's a contradiction this one!!

I don't get it either! I think he does it so he can boast to his friends about his pension. It seems like he's financially irresponsible in general and then uses his pension pot as his fix-all "look, I'm good with money, I've got a pension!"

I've offered so much help and now it's just getting frustrated. I've offered to create a plan for him. I've offered to move the overdraft money to a separate account that isn't in his general Natwest banking (so that he can't see it. I know that's financially illogical when he still has interest going out, but it makes sense to me emotionally to help him not overspend). But nothing works. If I bring up repayments of the debt, he just says it's fine he has a pension.

I think I'm just going to give up, save up my own share of a deposit and wait for him to catch up.

andyfromotley

Well i think you will just have to wait and see, if it comes to saving and he either can't save, or saves and still pays OD charges then you have conclusive proof that he is a financial dumbass, and make your decisions accordingly!! Looking at your debt free date then you will know soon enough.

Purplesky_2

You might want to tot up how much he's spent in fees and point out that he's achieved precisely nothing with it. He hasn't fed himself or enjoyed himself or bought anything of substance with it. It's purely for the pleasure of the bank continuing to service a debt (by a quick calculation, somewhere in the region of £900!).

Wouldn't THAT money have been better served being put into his pension? (Or for that matter, buying a few meals or buying nice wine or even having a flutter, if he wants....) It's simply ridiculous that he is paying the bank for the privilege of holding his money, when it sounds like he could pay it off quickly with just a few months of pain.

You could even offset it against the return he's been getting on his pension. He's actually only gained £100 instead of a thousand, because he's been losing money hand over fist on this debt!

Might be an approach you haven't tried yet?

Also I would suggest that you have a look at a book called sheconomics and work through some of the exercises with him in Chapters 2, 3 and ... the rest of the book, frankly. It might help you understand his emotions and history and how they influence how he handles money today and resolve some of the apparent contradictions. Although I would do the exercises separate from the book. You may hurt his masculinity if you do exercises from a book for women.

littlesprinkles

Is this the sort of man you see a future with? Honestly? It would take what 6/7 months of no pension contributions to pay this small debt off. If he cannot see that I would be wondering what kind of person I was getting involved with.

enthusiasticsaver

When they withdraw the interest free overdraft he will soon find out how stupid he has been. He sounds a bit immature and financially illiterate and this seems to have become a bit of a control issue with him standing his ground and maintaining he knows best. Paying interest on an overdraft and not building up some instant access savings is not a good move and presumably he is not saving towards a property if he has not saved a penny. Can you see yourself having a future with this man when you both seem to want different things?

Pixie5740

greensalad wrote: »

I said I thought he should pay off his overdraft as soon as he started work. I didn't nag constantly, maybe every 6 months over the last 2.5 years I've asked him how his savings are going.

And he does spend money on crap. Several hundred pounds of video games a month, three holidays a year with his friends, alcohol, betting etc. He puts money in his pension too of course, but he does spend money on other things. He has borrowed money off me in order to pay for things.

Maybe he will pay it of his own accord. But approaching three years of debt shows it's unlikely.

If he's spending lots of money on video games, drinking and gambling every month then that's what I'd focus on, not the pension contributions. Also stop lending him money when he runs out. A friend of mine does this and keeps a running total of what owes knowing full well she's unlikely to see any of it back. In 3 year he's accumulated £12k.

You both seem to have very different ideas about finances yet have joint accounts. I think you need to sit down and have a discussion with him, not specifically about the overdraft but about where you both are financially and where you'd like to be i.e. house deposit, mortgage, and how you're going to get there.

koselur

Hi greensalad

I just wanted to say that I am in a very similar situation to your OH except with two credit cards to boot It was researching pension schemes that made me realise how far in denial I was about my debt - it suddenly hit me how silly it was to be paying more money into a pension when I had thousands of pounds worth of debt that I was paying interest on.

Sounds a little to me like your OH is in debt denial... I would play a lot of keeping up with the Joneses and was very dishonest about my financial situation, probably through some misplaced pride. Of course it's his decision and it doesn't sound like he is struggling for money but I would echo the thoughts of the other posters in this thread - it might be a good idea to point out to him how much money he is wasting on OD fees & interest.

Does he have an emergency fund?

ReadingTim

I don't know about your bf's pension arrangements, but at my place of work, employee contributions are matched by contributions from the employer, up to a certain percentage of salary. The more you put in, the more they put in, to paraphrase the workplace pensions ad on the telly at the moment. Furthermore, if pension contributions are made by way of salary sacrifice, there's are also tax benefits making the pension a better investment than repaying the O/D.

However, given retirement is a long way off, and the O/D is a relatively low amount, it might be more prudent in the short term to prioritise the O/D above pension, or at least contribute an amount up to the value where the employer contribution is maximised (you're usually matched to a certain percentage, above which the employer doesn't go) and throw the rest at the O/D - he's got another 40-odd years of pension contributions to make before it pays out!

dancingfairy

I suspect that he doesn't see it as 'real debt' and thinks you are worrying over nothing, and that it's normalised as a lot of students have overdrafts (and also other people).
Does he understand how much it's costing him?
Why does it bother you so much? Maybe you need to try and explain to him that you bothered about it because x,y,z (maybe because to you it's a symbol of being held back and not being able to move on with your future and signals a lack of commitment.
I would assume it's not the overdraft per se that's the problem, it's the difference in attitudes towards it that is.
Would you be so bothered about the overdraft if he had an account and was regularly saving x amount of money in there? Is it proof of commitment that's bothering you?
At the end of the day you can't make anyone do anything they don't want to and you'll have to wait for him to come around to dealing with it in his own time, unless, of course that you decide that this is a deal breaker for you. You need to sit down and have a proper chat about where you both think things are heading and what you want.
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Pollygarter

Hope not to sound too jaded here but from a couple of decades further down the line I have seen this with couples. He has a great pension pot and she doesn't.

Hopefully it will be love and roses rveryday but given that close to 50% of marriages end in divorce, be realistic about your financial future. I wasnt.

If you're unmarried then anything in your pension pot is yours and yours alone. His debts are your debts too so are shared. So it makes great sense to squirrel away your cash in a pension.

Even if you are married, the law says there should be pension sharing but I've not seen a lot of it happen in practice unless there are no other assets, and it is not taken into account £ for £. So what's his is his and what's yours is half his.

If you love this man and intend to stay with him, make sure you match your savings in pensions £ for £. Otherwise you may have a nasty surprise waiting. If it makes getting a property take longer then so be it. If you stop paying for stuff for him, then his overdraft will impact sooner and he may make changes. Be prepared for that not to happen. When I had a sole account I was rarely overdrawn, even in student days. As soon as we had a joint account I spent twenty years in the red. Any savings I ever tried to make didn't help as it just freed up more overdraft limit for him to spend. Be sure you can live with your choices because you will have to!

All the best.