Best approach to take?

kezzygirl

I have had a chat with chat gpt and it suggested a few things, but I wanted human perspective.

I am 41, work full time for the nhs and have a good pension through them. My husband is 53 and has 17k in a pension. He has just started a new job and the pension contributions are set to kick in. According to Google, his pension contributions will be 5%, same as his employers. He can pay more, but the employer won't increase their contributions.

Hubby is obviously retiring sooner than me. Ideally, I really want to maximise his contributions,yet we have a big mortgage and debt.

Mortgage: 18years remaining,£191500 owed.

Unsecured debt interest free of about 18k- becoming due at various dates Dec 26 £1300, Feb 2027 £5080, may 2027 £2400, August 2027 £4800, also £3195 interest free sofa for about 2.5years.

WWe have about 7k in savings. Chat gpt suggested increasing this to 12-15k, whilst simultaneously prioritising paying the interest free debts. Only once debt is clear to prioritise mortgage overpayment and hubby's pension. I kind of feel this might be the wrong move? Our mortgage is 4.34%, so we are paying a large amount of interest on that balance. We will likely have further 0% transfer deals for the credit card debt,though of course this will likely be for a year with no fee.

Thoughts? What should we prioritise?

QrizB

According to Google, his pension contributions will be 5%, same as his employers.

Google might be wrong. What does the paperwork for his employer's pension scheme say regarding contributions?

Thoughts? What should we prioritise?

You've posted on DFW which suggests you want to become debt-free. If that isn't the goal, you might be better off asking over on this Pensions board.

born_again

Highest interest rate debts.

Do not bank on further 0% interest rate deals. That is when they dry up.

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82042872#Comment_82042872

He does not yet have the pension info, he has been there 3 weeks and I think the pension kicks in once he has been there a month.

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82042874#Comment_82042874

So mortgage first?

kezzygirl

Of course I want to get debt free, but I also want to get priorities straight to prepare for the future, while using money wisely.

born_again

https://forums.moneysavingexpert.com/discussion/comment/82042883#Comment_82042883

CC 1st, then you can overpay Mortgage once they are clear.

Husbands pension is best speaking to company about, as they may have a generous one where they match employee up to a higher %

QrizB

Of course I want to get debt free

But you seem happy to stooze £18k of zero-interest credit card debt. That's not debt-free.

I'm not going to derail this thread further; we're on DFW (not my home territory) and over here debt is generally seen as a bad thing.

Brie

I would have said put any excess money into a high interest savings account in preparation for paying off the 0% CCs. That will give it a bit of a boost. Then just ensure that the sofa will be paid within its 0% offer period. I'm assuming those payments don't vary whereas the 0% CCs will normally be taking just the minimum payment.

Once the cards are paid off up hubby's pension contribution by a couple of %. What goes out in one's pay won't be noticed and once set up there's no temptation to chop and change. Check whatever other saving benefits might be available through the employer - share save perhaps?

As you have by then go into the habit of setting money aside to clear the CCs continue with that maybe using regular savings accounts - again less accessible and can be set up to be paid automatically so you don't need to think about it each month. At the end of each high interest period (1 year?) use that saved chunk to pay down the mortgage.

At least that's how I'd work it.

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82042908#Comment_82042908

It's a debt free wannabe board, everyone here is in debt or debtfree. Happy to stooze 18k? Why the judgement?

kezzygirl

Do you think we should add more to emergency fund too?