Should I opt out?

TLinc1

Hi I’m 
after some advice 
should I opt out of my pension for 12 months and use my contributions to pay off  some of my credit card debt?
thanks

sourcrates

Hi,

Its not really a Yes/No answer is it, it depends on your circumstances, way more information is required before anyone can answer that question, can you give us more detail on your income/expenditure/debts/living circumstances etc.

Posting an SOA is usually the best way to start a thread.

Baron_Dale

Absolutely never opt put of your pension. In most cases it is like turning away free money. Your future self will not thank you at all. As suggested above post an SOA and people can then make useful suggestions to help you. Stopping pension contributions is not the answer.

tallyhoh

No, my partner did that to pay off debt years ago. He lost loads from his pension & now retired struggles for money. He's also still in debt as having cleared them he just hit the credit cards again

TheAble

As sourcrates says it's not a yes/no answer. Eg if your pension is already fully funded. Also depends on how your employer match works - it's not always the case that you're "throwing away free money."

Karonher

If you are paying more in interest than you are gaining in employer/government contributions then it may be a good idea. It will also depend on your age. You could make up the payments once you are no longer paying off the cards. 

I obviously cannot comment on other people's circumstances but I would be surprised if just one year of missed payments would be the cause of hardship in later life.

Andyjflet

No. Not advised, you will regret it later down the line. 

Sncjw

What industry do you work in?


If its the nhs please don't do this as the nhs has the best pension out there.. Plus you could easily forget to reenter the pensions scheme too. 

enthusiasticsaver

No you shouldn’t. A pension should be a priority expense as presumably your employer only pays in if you pay in. Opting out to pay debt will lead to less inc9me in retirement especially if it takes a long time. Ideally we need to see an soa but you should exhaust all other avenues first to repay the credit card debt and get your finances on a better footing.

How much debt do you have and are you paying interest?
How did you acquire the debt in the first place?
Can you afford minimum payments and have you looked at snowball calculators?