Juggling lots of balls to handle debt

gforum91

Ideally I would like to talk to someone private about this but I will be as succinct as possible

I a 64, still working ( self employed ), married, 3 kids, nice house, 9 months left on mortgage (£ approx 14k ). Due to business partner taking a runner over 15 years ago left with approx £30k credit card debit over 5 cards with interest rates varying from 15 to 21% interest. 3 Loans totalling approx £10k ( 6% interest )

So payments are Mortgage  £1800 per month, credit card payments approx £750 per month, loans approx £600 per month

I currently have a good contracting job until December but I want to know whats the best way to reduce the monthly debt including drawdown from some small private pensions, getting a loan to pay the credit cards etc

Any advice would be wonderful

I wish I could find a financial advisor to help but the ones I have tried have said around £5k to look at the pensions for example

Thanks

fatbelly

You're anonymous here - and we don't charge anything.

If you could complete a statement of affairs we could make suggestions (link is to a calculator - please format for mse).

Your aim should be to get debt free as soon as possible.

tlc678910

Hi,
I looked up the pensions advice service for you and it looks like it has been absorbed into this service:

https://moneyandpensionsservice.org.uk

They might be able to advise on whether using a lump sum from your pension is a good idea or not.  I agree don't pay 5k - that money could be paid off your debts.

Never respond to any cold calls about releasing your pension and take your time before making any decisions.

Good luck

fatbelly

You can get a free one-to-one from Pensionwise if:

• you’re aged 50 or over, and
• have a UK-based defined contribution pension – not a final salary or career average pension.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointment

You book it yourself online

gforum91

fatbelly said:

You're anonymous here - and we don't charge anything.

If you could complete a statement of affairs we could make suggestions (link is to a calculator - please format for mse).

Your aim should be to get debt free as soon as possible.

Not sure if you got my comment about my income which as a contractor varies greatly. I am PAYE up to November on a very good salary but I could have no income for a month after that or an income which could be half what I earn at the moment

fatbelly

Please average your income or just set it out as it is now, with a note that it will drop in 2023

You need to have some basis on which to plan and we need some numbers so we can help you.

Getting another loan and using up your pensions may not be the best way forward

RAS

Hi gforum91

Regardless of your income situation, your essential expenditure is going to be roughly the same each month, and your debts are the same.

So an SOA would help us understand your predicament more. Can you put away a sum into emergency savings that tide you over until you get another good gig? If you get a good contract, would that allow you to pay down some of the debt?

Lots of options. Most probably wouldn't work for you but you may only need one or two that do. 

enthusiasticsaver

I don’t think taking a further loan out is a good idea whether to pay credit cards or not. I also don’t think taking money out of your pension is a good idea if no other reason than you will have to pay a lot of tax on a withdrawal. 

Are these business loans/credit cards just in your name personally? 
 

gforum91

enthusiasticsaver said:

I don’t think taking a further loan out is a good idea whether to pay credit cards or not. I also don’t think taking money out of your pension is a good idea if no other reason than you will have to pay a lot of tax on a withdrawal. 

Are these business loans/credit cards just in your name personally? 
 

My initial thoughts were use part of my private pension to pay off half my mortgage which would reduce the payments down to around £800 per month but yes I did think a loan would be cheaper than all the credit cards, however over say 3 or 4 years I am not so sure.

I dont have any business loans, they are all personal loans in my name and except for one of the credit cards they are all in my name

Credit cards are as follows

My Name

------------

Card.         Balance.        Limit.             Interest

MBNA.         £ 8241      £ 10500       1.46% per month

Santander.   £ 4242.     £ 7050          ?

Halifax.         £ 7247     £ 8700          0.71% per month
MBNA           £ 2617     £ 4100          0.95% per month
Nationwide   £ 4567     £ 7500          1.08% per month

My Wife's Name

----------------------

Card.             Balance.        Limit.             Interest

Barclaycard.  £ 3047         £ 4600        1.54% per month

Vinknut

Are you not able to take 25% of your pension pot tax free, or have you already done that?

https://www.gov.uk/tax-on-pension/tax-free

Floss

Vinknut said:

Are you not able to take 25% of your pension pot tax free, or have you already done that?

https://www.gov.uk/tax-on-pension/tax-free

It's not actually that easy, or even possible, depending on the amount of schemes & total value of pension assets, and at 64 it may well be a bad idea as there is little time to rebuild the pot.

OP,  you've been given details of the Pensionwise service, I suggest you contact them to discuss your pension queries as they will know what is possible & will be able to give you unbiased advice.