Withdrawing small(ish) amount at 55

BOWFER

Hi, I turn 55 in a few months.
One of my pensions is with the Halifax, currently sitting at £136000
It's a pension from a former employer that I left, so it's not being added to at the moment (I have a separate pension with my new employer).
I'm not sure what 'type' of pension it is, it used to be Scottish Widows and is now with Halifax.
I'd like to take out approx £8000-£10000 just to clear off some debts.
Am I being silly to do this? 

Albermarle

I'm not sure what 'type' of pension it is,

Then you need to find out.....

If it is a standard Defined Contribution pension , you can take 25% of it tax free and the remaining 75% is taxable.

With most modern pensions you do not need to take all the 25% tax free at once , you can take part of it , which would seem to suit your requirements . Do not take any taxable income though, as it will limit current contributions to your workplace pension.

Just be careful though that you are raiding your own retirement income , so it depends how pressing the debts are 

dunstonh

Am I being silly to do this? 

It depends on the debt and your overall position.

You are effectively robbing your retirement years to pay for something in your working years.   Will you make that up and have enough for retirement?

Is the debt high-interest rate or low-interest rate?   Mortgages, for example, are usually not worth clearing with pension money unless you are actually retiring  They have lower interest rates than the returns on investments.   Whereas short term debt can be expensive.

So, the answer could be yes it is silly or no it is not silly but we don't have enough to go on.    

TVAS

Have you investigated getting a money cash transfer from a credit card. You can use MSE for eligibility before applying so you may be able to get 0% cash and 0% fee. This means it is cheaper than the old debt (probably but you didn't bother to provide the interest rate) and it will give you time to repay the debt from your income and as long as you pay within the term no interest. Cut up the card. If the debt is not repaid simply transfer to another card and get another 2 or 3 years. I am with all the above we are giving free advice so give is the information we need to help rather than a vague question.

BOWFER

It is mostly credit card debt, which I'd like to just clear and then I'll be able to top up the pension fund again at my leisure.
I intended to start making contributions to that pension again at some point anyway, although it seems to be growing at a decent rate without contributions.

BOWFER

TVAS said:

Have you investigated getting a money cash transfer from a credit card. You can use MSE for eligibility before applying so you may be able to get 0% cash and 0% fee. This means it is cheaper than the old debt (probably but you didn't bother to provide the interest rate) and it will give you time to repay the debt from your income and as long as you pay within the term no interest. Cut up the card. If the debt is not repaid simply transfer to another card and get another 2 or 3 years. I am with all the above we are giving free advice so give is the information we need to help rather than a vague question.

Yes, i've thought about doing this and have done it before.
But I can't be bothered for the sake of a few months and I want to keep this credit card.