Pension options to deal with debts / mortgage situation

Perksy5

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

zAndy1

Perksy5 said:

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

Couldn't get a remortgage due to the debts , trust me I tried but they said we didn't pass the affordability , obviously with changing to repayment and them only doing it to max age 70 that bumped the mortgage payment up a lot and with the debt / loan payments it just didn't work out I'm afraid.

Perksy5

zAndy1 said:

Perksy5 said:

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

Couldn't get a remortgage due to the debts , trust me I tried but they said we didn't pass the affordability , obviously with changing to repayment and them only doing it to max age 70 that bumped the mortgage payment up a lot and with the debt / loan payments it just didn't work out I'm afraid.

I'd nuke as much money as I could onto the mortgage. I think I'd prioritise secured loans more than unsecured every time.
If majority of your credit card debt is 0%, chances are you'll be able to keep that cycling over given your income. If you do have a flash car I'd definitely consider selling that to repay as much as you can while the marker value holds sooner than later.
Other than that cutting down on luxuries where you can and other non essentials will help you now and in the long term. It sounds like you've had a hell of a ride so far with the numbers you've racked up. Definitely time now for a change in lifestyle and address this before it gets worse and take action while you can before it's too late.
I wish you all the best. I'd be keen to hear how you get on, good luck.

zAndy1

Perksy5 said:

zAndy1 said:

Perksy5 said:

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

Couldn't get a remortgage due to the debts , trust me I tried but they said we didn't pass the affordability , obviously with changing to repayment and them only doing it to max age 70 that bumped the mortgage payment up a lot and with the debt / loan payments it just didn't work out I'm afraid.

I'd nuke as much money as I could onto the mortgage. I think I'd prioritise secured loans more than unsecured every time.
If majority of your credit card debt is 0%, chances are you'll be able to keep that cycling over given your income. If you do have a flash car I'd definitely consider selling that to repay as much as you can while the marker value holds sooner than later.
Other than that cutting down on luxuries where you can and other non essentials will help you now and in the long term. It sounds like you've had a hell of a ride so far with the numbers you've racked up. Definitely time now for a change in lifestyle and address this before it gets worse and take action while you can before it's too late.
I wish you all the best. I'd be keen to hear how you get on, good luck.

Thanks. I keep coming back to the pension lump sums -> pay credit cards off -> frees up money to throw at the mortgage scenario and it's a scenario that's extremely tempting in all honesty but I know a lot of people think it's a really bad idea. Gonna see what pensionwise say before I make any decisions, I suspect though they'll just be reading from a script and it won't be particularly useful but we'll see

Brie

zAndy1 said:

Thanks. I keep coming back to the pension lump sums -> pay credit cards off -> frees up money to throw at the mortgage scenario and it's a scenario that's extremely tempting in all honesty but I know a lot of people think it's a really bad idea. Gonna see what pensionwise say before I make any decisions, I suspect though they'll just be reading from a script and it won't be particularly useful but we'll see

Hey there - still haven't read all of this but it does appear that the pension is DC.  If you take a lump sum maybe that's ok espcially if it is tax free.  Just be cautious if you are then tempted into doing drawdown with the balance as that's what will mess up your tax free status for whatever scheme you are still contributing to.  The tax free amount drops to £4k a year which when I looked at this option a few years back meant that my tax bill would go up significantly.

Not saying you shouldn't take the 25%.  I did on my DB scheme earlier this year as it cleared the mortgage.  But my situation is very different from yours in that I won't be depending on my pension funds for my income over the next 150 (or whatever) years.

Sea_Shell

Another point to bear in mind is the current value of the pension due to the drops in the markets over the last year. 


Selling 25% will crystallise those losses, leaving you with the balance to try and claw back growth in time.

As an exercise, you could compare the unit price of your pension against where it was last November and see how much that would cost you if/when the unit prices recover.

wjr4

zAndy1 said:

Perksy5 said:

zAndy1 said:

Perksy5 said:

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

Couldn't get a remortgage due to the debts , trust me I tried but they said we didn't pass the affordability , obviously with changing to repayment and them only doing it to max age 70 that bumped the mortgage payment up a lot and with the debt / loan payments it just didn't work out I'm afraid.

I'd nuke as much money as I could onto the mortgage. I think I'd prioritise secured loans more than unsecured every time.
If majority of your credit card debt is 0%, chances are you'll be able to keep that cycling over given your income. If you do have a flash car I'd definitely consider selling that to repay as much as you can while the marker value holds sooner than later.
Other than that cutting down on luxuries where you can and other non essentials will help you now and in the long term. It sounds like you've had a hell of a ride so far with the numbers you've racked up. Definitely time now for a change in lifestyle and address this before it gets worse and take action while you can before it's too late.
I wish you all the best. I'd be keen to hear how you get on, good luck.

Thanks. I keep coming back to the pension lump sums -> pay credit cards off -> frees up money to throw at the mortgage scenario and it's a scenario that's extremely tempting in all honesty but I know a lot of people think it's a really bad idea. Gonna see what pensionwise say before I make any decisions, I suspect though they'll just be reading from a script and it won't be particularly useful but we'll see

Pension wise will not give you advice as they are not advisers. They will simply tell you your options. 

zAndy1

wjr4 said:

zAndy1 said:

Perksy5 said:

zAndy1 said:

Perksy5 said:

With an income like that why on earth didn't you remortgage when rates were low to consolidate as much as you could? Banks love these stories and you would've been a prime candidate. 
I haven't a clue what your future plans are re the property but it looks like you need to take urgent action and fast. Definitely reach out to some debt charities for guidance, trim the fat off any expenditure where possible. Buckle up and start paying down before that road gets any bumpier. 

Couldn't get a remortgage due to the debts , trust me I tried but they said we didn't pass the affordability , obviously with changing to repayment and them only doing it to max age 70 that bumped the mortgage payment up a lot and with the debt / loan payments it just didn't work out I'm afraid.

I'd nuke as much money as I could onto the mortgage. I think I'd prioritise secured loans more than unsecured every time.
If majority of your credit card debt is 0%, chances are you'll be able to keep that cycling over given your income. If you do have a flash car I'd definitely consider selling that to repay as much as you can while the marker value holds sooner than later.
Other than that cutting down on luxuries where you can and other non essentials will help you now and in the long term. It sounds like you've had a hell of a ride so far with the numbers you've racked up. Definitely time now for a change in lifestyle and address this before it gets worse and take action while you can before it's too late.
I wish you all the best. I'd be keen to hear how you get on, good luck.

Thanks. I keep coming back to the pension lump sums -> pay credit cards off -> frees up money to throw at the mortgage scenario and it's a scenario that's extremely tempting in all honesty but I know a lot of people think it's a really bad idea. Gonna see what pensionwise say before I make any decisions, I suspect though they'll just be reading from a script and it won't be particularly useful but we'll see

Pension wise will not give you advice as they are not advisers. They will simply tell you your options. 

Yeah I've gathered that, I know my options , just going through the motions talking to them really as Aviva suggest talking to them before doing anything

zAndy1

Sea_Shell said:

Another point to bear in mind is the current value of the pension due to the drops in the markets over the last year. 


Selling 25% will crystallise those losses, leaving you with the balance to try and claw back growth in time.

As an exercise, you could compare the unit price of your pension against where it was last November and see how much that would cost you if/when the unit prices recover.

Well the biggest fund has lost approx £8k since Nov last year when the unit price was at it's highest of £4.75 and it's now £4.14. So assuming I take a 25% tfls I assume that will result in me selling 25% of the units I hold in that fund which if the price recovered to what it was at it's highest would be worth about £2k more than now. Another fund the highest unit price was £6.81 and it's now £6.27. The overall fund value has decreased £9k compared to a year ago so about a 10% drop.

Grumpy_chap

zAndy1 said:

Thanks. I keep coming back to the pension lump sums -> pay credit cards off -> frees up money to throw at the mortgage scenario and it's a scenario that's extremely tempting in all honesty but I know a lot of people think it's a really bad idea. Gonna see what pensionwise say before I make any decisions, I suspect though they'll just be reading from a script and it won't be particularly useful but we'll see

You do indeed and I suspect that your mind was really already made up on that before starting either of the threads this week and the only purpose of the threads was to seek validation of your decision.  That validation has not been forthcoming.

Do take the counsel of pensionwise and also an IFA before making this decision.

Perksy5 said:

Other than that cutting down on luxuries where you can and other non essentials will help you now and in the long term. It sounds like you've had a hell of a ride so far with the numbers you've racked up. Definitely time now for a change in lifestyle and address this before it gets worse and take action while you can before it's too late.

Irrespective of what the OP does now with regard to the pension, I suspect that this is going to be the hardest thing for the OP to do. 
I understand the OP has been in a similar position in the past and went for bankruptcy.
The OP clearly has a lifestyle now that exceeds their available finances, hence the current position.
The OP has had a reason to reject every option mentioned in the threads on ways to reduce expenditure (go to 1 car, sell the newer car, cancel SKY / Netflix, downsize house, allow a family friend to adopt the pet, more careful budgeting for regular spends, etc.).  

I do wish the OP well, I don't agree the pension lump sum is the solution and the situation does seem to be one that can be managed without that step but, whatever the OP does now, I do hope they can resolve the situation in a sustainable way that does not mean returning here for similar advice again when the OP is turning 65 rather than 55.

zAndy1 said:

Well the biggest fund has lost approx £8k since Nov last year when the unit price was at it's highest of £4.75 and it's now £4.14. 
Another fund the highest unit price was £6.81 and it's now £6.27.
The overall fund value has decreased £9k compared to a year ago so about a 10% drop.

Selling funds to crystalise the 25% TFLS while everything is at a low is the worst possible timing.
If the OP still decides on this path, there may be merit in trying to implement the other suggestions first and revisiting the pension option in 12-months' time.  This may even prove that the alternatives can work.  Of course, my crystal ball is no better than anyone else has and pension funds may fall further in that 12-months.  I hope not, particularly as I have been taking the opportunity to buy cheap, but I do not know not.