Pension - Freeze or not?

poppyg_2

Hi

It has been suggested by people in the DFW forum that I come here to seek a bit of advice regarding my pension scheme

I am currently in a fair bit of debt (approx £40k). I pay approx £80/90 per month into a local government final salary pension scheme. It's a good scheme with high employer contributions.

However, with being in debt I am wondering whether I should temporarily freeze my contributions to the scheme until I am financially a bit better off in order to target this additional £80 at paying one of my debts off quicker? What do you guys think?

I am 29 and have been paying into the scheme since I was 20 so about 9 years now

Any advice appreciated

Poppy x

dunstonh

The £80 you are paying isnt really £80. You get tax relief on that so its only really £64 you are paying (assuming basic rate). The actual benefit of that £64 is probably closer to £300.

So, you need to decide if are willing to give up around £300 of benefits to be better off by £64 a month.

poppyg_2

Thanks Dunston that's a really big help, thinking about it that way unless I get absolutely desperate than I need to stay in the scheme, it is a good benefit