Dipping into pension pot to pay off credit card debt.

underboyleheating

lisyloo wrote: »

Do you have any other options?
Can you cut your budget elsewhere?
Could you try doing a second job over the Xmas period for a bit of extra cash?

You still have the general problem that you need proper advice on your pensions and to get that you have to pay for it.

I don’t really have any other options as my budget is already pretty tight as it is. Doing another job isn’t an option either as I’m the main carer for my daughter and my time is already thinly spread.

Don’t worry I will research it thoroughly before making any rash decisions as I do understand how important a pension is to your retirement. That’s one of the main reasons why I came on here seeking advice. I will mention some of the concerns brought up when I meet up with the Prudential advisor and my chosen IFA. You said in your reply that I would need to pay for proper advice, I assumed IFA pension advice was free, or is that not the case?

lisyloo

IFAs will want to be paid somehow.
They can work on a fee paying or commission basis.
You might be able to get some free advice on your old pensions whilst they are advising you on a new product that generates commission/income for them.

maximumgardener

How much are you paying on your mortgage? whats the interest rate / duration left on the loan?

maybe adding 5k to mortgage could be cost effective route till you get your pensions advice clear with IFA?

plus make some savings elsewhere. every little helps

coyrls

lisyloo wrote: »

IFAs will want to be paid somehow.
They can work on a fee paying or commission basis.
You might be able to get some free advice on your old pensions whilst they are advising you on a new product that generates commission/income for them.

I don't think an IFA can work on a commission basis; they can rebate any commissions they get but that's not the same thing. The majority of products that an IFA is likely to recommend will not pay commission anyway.

lisyloo

coyrls wrote: »

I don't think an IFA can work on a commission basis; they can rebate any commissions they get but that's not the same thing. The majority of products that an IFA is likely to recommend will not pay commission anyway.

A bit confused you what you said.
If they can rebate commission then that must mean they can receive it?
Or have I misunderstood that?

Are you saying there is only fee paying advice do or tied advice?

My IFA receives commission BTW so they definitely work on this basis.

GDB2222

Out of interest, how much are your current pension contributions?

atush

Commisions are no longer paid. It is a fee basis (either a set fee or as % of any pot/contributions.

IFAs are NOT free, initial broad inforamtion is free from govt sevices.

While you pay a fee, it can be paid thru the pension. Which means the cost will be reduced as it is part of the pension. So every 100 of fee will cost you 80 is you pay BR tax.

lisyloo

Sorry if it sounds like I’m being pedantic (I’m not just retrying to uncover the subtlety that alluding me).

What’s the difference between commisision and a % being paid from your pot?

Given the OP is looking to clear a smallish debt I’d hazard a guess they don’t want to pay an up-front fee.

underboyleheating

GDB2222 wrote: »

Out of interest, how much are your current pension contributions?

I only pay a small amount each month, which is currently £50 (I will continue to pay this after any pension merger). In the grand scheme of things the 5k debt I’m paying off is relatively small, if I can do this without causing too much pension pot damage I will be happy.

coyrls

lisyloo wrote: »

Sorry if it sounds like I’m being pedantic (I’m not just retrying to uncover the subtlety that alluding me).

What’s the difference between commisision and a % being paid from your pot?

Given the OP is looking to clear a smallish debt I’d hazard a guess they don’t want to pay an up-front fee.

Commision is paid by a product provider. A fee is paid by the client. The fee can be taken from the client's pension pot.