Dipping into pension pot to pay off credit card debt.

GDB2222

underboyleheating wrote: »

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.

If you are stuck with paying 2.5% pm on the debt, you might do better to take a pension contribution holiday and use that money to pay down the debt slowly. However, taking a 0% balance transfer looks like a good idea too. It's hard to suggest cashing in one of the pensions early without more info about surrender penalties etc.

Won't an IFA want quite a large fee to advise? Is that worthwhile? It's still costing you even if it's coming from the pension fund.

underboyleheating

GDB2222 wrote: »

If you are stuck with paying 2.5% pm on the debt, you might do better to take a pension contribution holiday and use that money to pay down the debt slowly.

The only pension I currently pay into is my Royal London, formerly CIS pension. This pension product is no longer available (I started it in 1996). I was informed by CIS several years ago that if I stopped paying into it, I would not be able to restart it as it no longer exists as an option.

maximumgardener

you really need to sit down with an IFA.....make sure its an IFA and get some real recommendations from the whole market.
They will asses your risk profile etc and probably steer you to a balance of funds to spread risk.

Usually they will offer initial 1 hr consultation "free" and get paid when you sign up with your Choice
many will require a min investment portfolio of around 80-100k

(not just the ones you have already ...they are quite biased it would seem and may not be ideal for you)

you may be able to start a new arrangement elsewhere and combine 2 pensions , take some tax free cash from one and keep investing into the other.

this should be easy to do and

atush

I think they need to post an SOA or get budgeting advice.

maximumgardener

atush wrote: »

I think they need to post an SOA or get budgeting advice.

agree 100%. there is a lack of definitive info from OP

difficult to second guess but raiding pension probably should be a last resort

mg