Thinking about dipping into your pension…


Dipping into your pension earlier than you need to, or want to, is usually not the only answer. So if you find yourself worrying about clearing down debt and your pension pot becomes a tempting solution, just stop and have a think! There are many other avenues you could explore first.


Check you’re budgeting properly first!


We always advise against knee-jerk reactions to financial situations. Money can be stressful – and so it’s little wonder that the most obvious solutions go out the window first when you’re worrying. Quite often, if you simply sit down and list your income and outgoings, you can give the situation some proportion. You may even find that the problem is not quite as bad as you thought. You will almost certainly find some areas where you could make useful cuts.


Making strategic cuts where you can…


Cuts don’t always mean going without! Quite often, you can find cheaper providers to the same ends. That’s why Money Saving sites are so popular! They offer simple tips for changes of providers for phone and internet, gas and electric etc. that can really add up. At the end of the day, energy is energy no matter who you get it from! It’s surprising just how much to can save by keeping tabs on what providers offer, often there are perks for changing that loyal customers, sadly, miss out on. Looking to see where you can save may well spare you from dipping into your pension pot. So it’s worth taking a look before you do anything impulsive!


Is down-sizing an option?


This won’t be for everyone by any stretch of the imagination. That being said, it’s worth considering whether it might be time to down-size if you find yourself needing extra funds and the house is now empty…


Cash in the Attic?


Thanks to the TV program, this now sound a little cliched… but the point remains that is it’s a great way of making money. Seeing what you have tucked away that you no longer want or need can help you bring in much needed cash. You can also have great fun in the process by bringing out your inner bargain hunter!


You don’t have to limit this to just your attic either. Once you’ve got the bug, you’ll fast find yourself questioning what else you really need versus what you’re just holding onto for the sake of it. A common example often finds people running two cars when they only really need one. The saving potential is obviously huge once you factor in the savings made on Tax, fuel and MOT on top of the general car maintenance.


Cutting your monthly mortgage payment


For most people, their mortgage is their biggest monthly outgoing. It needs to be treated with careful consideration and so we would always recommend discussing any changes with a reputable adviser. However, you may find that there are ways to cut your mortgage costs that will spare you from dipping into your pension fund.


In short…


While dipping into your pension might seem like a good quick-fix solution, often there are many other possible solutions. Always remember that a pension is ultimately there to give you peace of mind that you can fund your retirement. So the more you tuck into it at any one time, the less there is for when you need it most. It’s nearly always best to exhaust all other means and to use your pension for the purpose it was designed for.


If you need advice on your pension and would like to talk to a specialist, please do call us on 01243 767 469, or email us from our contact page. We’d be happy to help!