Best way out of a hole...

35k unsecured debt in my name only (married). Married 5 years ago. Wife owns house from her previous marriage and is mortgage free. I pay my wife 50% of my salary, after my monthly debt repayments I'm left with approx £200 a month. I'm 55 this year, should I suck 25% tax free lump sum (£9k) and draw down more but only enough to pay 25% income tax?


  • cymruchris
    cymruchris Posts: 4,880
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    I'll let others offer advice on the 'solution' - but I'd question - how did you get to where you are - and what will you do to ensure you don't get here again? Does your wife know the true extent of the problem?

    If this has come about through general overspending over a period of years - it may be the best way out is to look at where you're spending, and how you can change the way you live to be able to tackle the debt.

    Just something to clear in my head - Why are you giving half of your salary to your wife? As much as I'm sure she's a lovely lady - is she working for you? What's that half being used for?
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  • RAS
    RAS Posts: 32,442
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    Also, how's the income distribution between you? Are you the main earner or the minor one?
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  • Keep_pedalling
    Keep_pedalling Posts: 16,139
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    How is the 50% of your income going to your wife arrived at? Does it accurately reflect your contribution household expenses? 
  • drongo22
    drongo22 Posts: 2
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    Thanks for the replies! I pay £1000 / month to cover all bills. Also this is used for holidays abroad etc. Wife also works but earns less than I do. I'm quite sure that the pension option is the quickest way to pay off my debts as can be debt free April 2025. The defined contribution pension scheme I intend to use doesn't even keep up with inflation, but I do have a frozen defined benefit pension also which will pay a reasonable amount in retirement.
  • MFWannabe
    MFWannabe Posts: 1,953
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    Is your wife aware of your debts?
    Why are you considering taking money from pension to pay off debts? This short term ‘fix’ could be very detrimental to your future self. Also how will you stop yourself getting into debt again?
    Why not do an soa and see where you could make cutbacks to pay off the debts?
    28/12/23: Debt total £12,900/13,192.13
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,276
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    Once you take the 25% TFLS you have to draw on the rest so you will be paying tax at your marginal rate as you are still working. Will that take you into the higher rate? Personally I would not be drawing on your pension to pay off unsecured debts. Is that £1000 you are paying a true reflection of the bills? 

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  • Hoenir
    Hoenir Posts: 1,158
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    drongo22 said:
     Also this is used for holidays abroad etc. 
    Seems that you are living a lifestyle that's unaffordable. Time for a frank discussion. You need to tackle this together. Otherwise is going to spiral out of control. 
  • EssexHebridean
    EssexHebridean Posts: 20,792
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    As in most cases, it sounds like the first step here is an SOA and a proper household budget. 

    Robbing from your future selves to pay off unsecured debt now is probably a very poor idea indeed - but without more information about your situation it's very difficult to suggest the proper route for you to explore. 
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