Using Pension Fund to Clear Loan

[krattapopov]

Hi All,

Just looking for some pro's and con's on my situation. Like alot of other people on the site we are in a tricky situation. We amassed some debt over the last few years and my wife was made redundant over a year ago now and was recently diagnosed ill and can't work (would she be entitled to some state benefit?) I'm not looking for some figure breakdowns here, just some general advice if possible.

We have a mortgage and also have a loan of 25k from the bank (who we have the mortgage with) and then also have a credit union loan of 11500 (5500 in shares).

I have a pension fund of about 12500 k which I've been contributing to for 5 years or so. Should I seek a return of my contributions and clear down the credit union loan which would free up about 400 a month which I badly need or should I just try an battle on? I'm 28. I also know that I wouldn't get the full value of the fund, there would be a certain amount due to my employer and some due to the tax man.

I'm very reluctant to do this as I've always been a strong believer in planning for the future, but the cost of living today is really starting to effect us and we are just about breaking even for income and expenditure.

What are peoples thoughts on this?

 

[PaddyW]

I don't think you're going to be able to touch that pension until retirement age.

 

[Financial_Al]

Hi,
Good thinking but like the last post I don’t think you can touch the pension. I would suggest your wife applying for welfare asap as she should be entitle to Illness Benefit. I would also ring the bank today and inform them of your situation. I would also post them in a letter giving a breakdown of your financial situation. Push them for a solution. If money tight then get advice on going interest only for a period of time to reduce the pressure.

 

[krattapopov]

Thanks for the post guys, I only copped when I went for a cup of tea there that I'm in the scheme for more than 2 years so I'm not entitled to do what I thought I could...

Thanks for the advice, have already been in touch with the bank and made them aware that was a few months ago but will head back to them now and see about easing the pressure.

Will get my wife to apply for illness benefit and will see if that makes any difference

Thanks for the help lads