I think I know the answer

dae2022

Hi

I think I know the answer to this but I would like to ask the question anyway!

I am 54 years old, married and don’t own my own home, I don’t have any savings and only have an old pension pot of £54k. I am not currently contributing to a work place pension. I have debts of around £10k that have an average interest rate of 34.9%

My question is..

How should I tackle my current situation to enable me to start savings and/or top my pension?

I was thinking that I should clear my debts before starting to save or set a pension plan in place?

Should I also consider life insurance to safeguard my family?

This is probably pretty obvious to most people but I just don’t have a clue!

RAS

Please read this Pension money - will we have to settle credit card debt? — MoneySavingExpert Forum , and if you've got dependents get some cheap term insurance to at least cover your debts, as a priority. Unless your current pension would pay out a decent death benefit in which case make sure you have completed any nomination form. 

Then do your statement of affairs SOA Calculator (lemonfool.co.uk)

You'll need the APRs for each of your debts, as well as their values and limits. Ideally, sit down with the last few months bank statements and work out what you've been spending on everything. 

And have a serious think how you came to have spent that £10k. Was it holidays, keeping up with the Jones, or keeping an adult child who did/does not contribute a full share to the finances, for example.

TheAble

Most employers will usually match the % you put into a pension, up to a limit (I think they may be required to nowadays?) so it is usually worth contributing at least that amount, but will depend on your own employer. Plus of course the contributions are tax free which is another benefit.

The general rule is start sooner rather than later. At 54 you've certainly left it later, but definitely start in any case! If you really work at it you can still accumulate a meaningful sum.

fatbelly

We definitely need a soa.

Also take a look at your credit file. There are free services for all three agencies and you might even get cashback through topcashback or quidco - you need to join both.

At the moment, topcashback is offering £6 to sign up to clearscore (equifax). The others are mse credit club (experian) and credit karma (transunion)

The principle is every little helps.

On your credit file you're looking to check that you are not associated to anyone, except possibly your partner if you have a joint financial product. Check address history is correct, that you are on electoral roll, and no negative markers showing late or missed payments. If necessary set up direct debits for min payments on credit cards.