Yikes! I'm making the call tomorrow
luvpenguins
Posts: 39 Forumite
I am 55 in January, and I believe I will have access to 25% of my pension tax free then.
A little background. I have been a single mum to two wonderful boys since 1996. The boys are now grown up and following good careers, we managed OK over the years with little to no input from their dad, but it was hard managing a very demanding full time job and two growing boys. Thank god for mums, I couldn't have managed without her help.
Anyway. I have some debt, about £15,000 over 0% credit cards, and I also have £60,000 to pay on my mortgage. Currently, it is due to be paid when I am 67, so in 2029 :eek:
The house is worth about £180,000.
I have worked ever since I was 16, and all my NI payments are up to date. I have worked for my current employer since 1993, starting with a final salary pension. It was changed to a defined benefits pension sometime in the mid 2000s, not sure when. I also paid some AVCs for a while.
This is my plan. I ring HR pensions tomorrow and find out if I can withdraw £15,000 (tax free) in January so that I can pay off my debts. The money that I pay towards those debts I will pay towards my mortgage instead (I checked, I can overpay) and so bring that debt down more quickly. I'm hoping to double my current mortgage payment of £571.00 to about £1071.00.
If it matters, I earn £3019 per month before tax, I have a company car though, so not sure whether benefits in kind will make any difference, and I have been paying into the company pension plan for yonks at a percentage of which I don't know right now, but I will check tomorrow.
I know nothing about pensions, so my questions are:
Is this going to be possible?
Do you think I will have £15,000 available from my pension pot?
Is this a stupid idea?
Will I need to employ a financial adviser at huge cost to steer me through this?
Sorry if I am waffling, I might be able to provide more figures tomorrow when I have made the phone call.
Thanks for reading, at the least there might some other woman out there who hasn't a clue as to how to move forward but who wants a bit of a lifestyle change sooner rather than later :T
xx
A little background. I have been a single mum to two wonderful boys since 1996. The boys are now grown up and following good careers, we managed OK over the years with little to no input from their dad, but it was hard managing a very demanding full time job and two growing boys. Thank god for mums, I couldn't have managed without her help.
Anyway. I have some debt, about £15,000 over 0% credit cards, and I also have £60,000 to pay on my mortgage. Currently, it is due to be paid when I am 67, so in 2029 :eek:
The house is worth about £180,000.
I have worked ever since I was 16, and all my NI payments are up to date. I have worked for my current employer since 1993, starting with a final salary pension. It was changed to a defined benefits pension sometime in the mid 2000s, not sure when. I also paid some AVCs for a while.
This is my plan. I ring HR pensions tomorrow and find out if I can withdraw £15,000 (tax free) in January so that I can pay off my debts. The money that I pay towards those debts I will pay towards my mortgage instead (I checked, I can overpay) and so bring that debt down more quickly. I'm hoping to double my current mortgage payment of £571.00 to about £1071.00.
If it matters, I earn £3019 per month before tax, I have a company car though, so not sure whether benefits in kind will make any difference, and I have been paying into the company pension plan for yonks at a percentage of which I don't know right now, but I will check tomorrow.
I know nothing about pensions, so my questions are:
Is this going to be possible?
Do you think I will have £15,000 available from my pension pot?
Is this a stupid idea?
Will I need to employ a financial adviser at huge cost to steer me through this?
Sorry if I am waffling, I might be able to provide more figures tomorrow when I have made the phone call.
Thanks for reading, at the least there might some other woman out there who hasn't a clue as to how to move forward but who wants a bit of a lifestyle change sooner rather than later :T
xx
0
Comments
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Not all pension schemes allow you to do it
Who is the pension withEx forum ambassador
Long term forum member0 -
Oh, that's a blow. I don't know, I'll find out tomorrow. Thank you anyway0
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I suggest a chat with Pensionwise, free government helpline: https://www.pensionwise.gov.uk/en0
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I had a quick look, I need to find out a bit more about the supplier, which I will do tomorrow. Thanks for the link though, I'll go back when I've got more info.0
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If the credit card debt can run at 0% and the mortgage rate is low then there's no hurry to make a decision. Get all the facts first.
On what you have described it seems possible to try and both repay your credit card and overpay your mortgage from income over the next few years without raiding your pension pot and reducing your income in retirement.
Does your company offer a cash option instead of taking the car? If your mileage is low it can work out cheaper to just own a second hand car for 3 years.
Even if it's not quite possible the pension funds will have had a good chance to grow and inflation will have erroded the real value of the debt so it will feel a smaller balance to clear.
Alex.0 -
Thank you Alexand, but I can't do both. The credit card debt is stopping me from putting that money towards the mortgage, which is why I would like to get rid of it. I pay £500 ish towards CCs, I want to be debt free and pay that 'extra' money to the mortgage.0
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Plus, re the car, I have a new one next year in March, it is a hybrid electric petrol BMW thing, I am told my tax will go right down, and I am going to go for paying my own mileage at 11p per mile, so that will help from May 2018.
I will need lessons on how to drive the thing though.0 -
If you able to put £500 towards either the credit card or mortgage overpayment each month for the next 7 years (to the age of 62) then that's £42k which alongside your regular mortgage repayment should clear most of it?0
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No. I currently pay £500 towards the credit cards. I want to pay them off, with a lump sum from my pension, so that I can put that £500 towards my mortgage. That is my question.0
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In which case as per Browntoa's feedback it depends on the rules of your scheme so you will need to investigate.0
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