Pay off debt or keep investments?

derekpayne

Ok now I have started the ball rolling, what difference would it make to you all if the money is in a SIPP with the tax free lump sum already taken and the remaing investments subject to 25% tax taken off when withdrawn, I think its a no brainer myself?

derekpayne

Oh and the investments are diverse funds about 30 of them with average of around 10% returns

eskbanker

derekpayne said:

Ok now I have started the ball rolling, what difference would it make to you all if the money is in a SIPP with the tax free lump sum already taken and the remaing investments subject to 25% tax taken off when withdrawn, I think its a no brainer myself?

What readily-accessible money do you have?  As mentioned earlier, it's conventional when stoozing to have cash reserves available - also, having withdrawn from a SIPP obviously doesn't mean that you're actually retired without non-pension income but if that is the case, or will become so in the short to medium term, then that may start to compromise your ability to raise credit.  Bottom line is that even after your latest post, we can still only see a relatively small portion of your financial circumstances, so anyone on here is just guessing really, based on what you've chosen to share thus far....

Another_Saver

derekpayne said:

Oh and the investments are diverse funds about 30 of them with average of around 10% returns

...
Why does anyone need 30 funds and what do you mean by an average of 10% returns? Average of 10% a year since you bought them, 10% total since you bought them, are you saying you think they'll return 10% a year.
As above the information you have given us very limited to what one would need to give an informed opinion.

Thrugelmir

derekpayne said:

Oh and the investments are diverse funds about 30 of them with average of around 10% returns

Difficult not to have done well in the short term. The challenge is to maintain a decent return over the longer term and ride out the dips when they come. 

Msjf

derekpayne said:

Ok now I have started the ball rolling, what difference would it make to you all if the money is in a SIPP with the tax free lump sum already taken and the remaing investments subject to 25% tax taken off when withdrawn, I think its a no brainer myself?

How close are you from retirement?  Are you still contributing to a pension?  Perhaps  you could consider building a new  SIPP pot, if you aren't already, and benefitting from the government top up, and using that to pay down/off the credit you keep rolling over? 

I've made use of CC 0% deals for investment purposes previously, but not now. 

There is great peace of mind (more than I expected) knowing that should income fall, businesses or jobs fail, or health decline or worse, there are few fixed payments to make. We paid off our mortgage this year too, despite believing that investment returns from the capital would likely exceed the low interest on the outstanding mortgage balance over the remaining seven years of the term. 

In the climate of disease risk this year, my priorities changed - and I decided that should my OH have to take over managing my financial affairs or administer my estate, I wanted it be as simple as possible. My OH will be due the full value of my SIPP, which is outside the value of my estate if the worst happens, but I hold cash outside of the pension wrapper which he can easily and quickly access should he need to (apart from what's in Premium Bonds which I understand from other threads could take a while for him to get at!)

Maybe you feel secure in your income and health, but it sounds like your OH is less so.

Alexland

derekpayne said:
what difference would it make to you all if the money is in a SIPP with the tax free lump sum already taken and the remaing investments subject to 25% tax taken off when withdrawn

If you have taken the 25% tax free lump sum and then start drawing on the remaining 75% it will trigger the MPAA limiting how much you can contribute into pensions going forward. The tax on the withdrawal will depend on what other income you have in that tax year but assuming you already have enough income to use the personal allowance but not so much that this withdrawal would push you into higher rate then the tax on it would be basic rate at 20%.

pip895

I'm not sure what your cash reserves are but unless they are substantially greater than the normal recommended minimum, then you are essentially borrowing money to invest in the stock market.  This rings alarm bells for me - Its not worth the risk - now is a good time to unwind this - ensure you have cash in your SIPP to cover the debt now and pull it out over time as the tax situation dictates.

Another_Saver

pip895 said:

I'm not sure what your cash reserves are but unless they are substantially greater than the normal recommended minimum, then you are essentially borrowing money to invest in the stock market.  This rings alarm bells for me - Its not worth the risk - now is a good time to unwind this - ensure you have cash in your SIPP to cover the debt now and pull it out over time as the tax situation dictates.

Except all the op is doing is stoozing 6% of their liquid assets on 0% credit cards - I don't see the risk as long as they ideally have at least enough cash reserves in easy access savings accounts to pay it off.

pip895

Another_Saver said:

pip895 said:

I'm not sure what your cash reserves are but unless they are substantially greater than the normal recommended minimum, then you are essentially borrowing money to invest in the stock market.  This rings alarm bells for me - Its not worth the risk - now is a good time to unwind this - ensure you have cash in your SIPP to cover the debt now and pull it out over time as the tax situation dictates.

Except all the op is doing is stoozing 6% of their liquid assets on 0% credit cards - I don't see the risk as long as they ideally have at least enough cash reserves in easy access savings accounts to pay it off.

We don't know his cash reserves - I suspect if he had plenty he wouldn't be suggesting selling investments to repay the credit card though..