# Use A Pension to Pay off Debt



## Tinkertailor (8 Aug 2014)

hi Guys first Post,hope i Dont make a mess of it or offend anyone.
I have a a large debt owed to a bank, they have a judgement against a property  i own , which i am more than happy to sell and give them the proceeds, however it only covers about 10% of the debt.I have a personal Pension which a its current encashment value stands at about 50% of the debt but potentially realise well over 100% of the debt when it matures in 2036.My question is could i offer my pension as a settlement either as it stands now or as an agreement to dicharge my debt with the proceeds of the investment when it matures?
Footnote;

The pension is held by New Ireland whom i believe are a subsidiary of Bank Of Ireland - to whom i owe the debt.

Many thanks in advance to anyone with comments/ideas.


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## Sunny (8 Aug 2014)

Tinkertailor said:


> hi Guys first Post,hope i Dont make a mess of it or offend anyone.
> I have a a large debt owed to a bank, they have a judgement against a property i own , which i am more than happy to sell and give them the proceeds, however it only covers about 10% of the debt.I have a personal Pension which a its current encashment value stands at about 50% of the debt but potentially realise well over 100% of the debt when it matures in 2036.My question is could i offer my pension as a settlement either as it stands now or as an agreement to dicharge my debt with the proceeds of the investment when it matures?
> 
> Many thanks in advance to anyone with comments/ideas.


 
No. You can't pledge or use your pension as collateral at the moment. I know there are people who think this should change. Brendan has made a couple of interesting points on the subject elsewhere.


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## Tinkertailor (8 Aug 2014)

Hi Sunny, Thanks for that , I'll look up brendans posts so.


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## Gerry Canning (8 Aug 2014)

Tinkertaylor; 

Be very slow to ever use your pension fund to cover other debt. 
I know there are views around this but on balance your pension is for retirement, not for working life issues. 
Spend your pension fund now and it is probable you will be in penury in retirement!


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## Tinkertailor (8 Aug 2014)

Hi Gerry, Im In Penury right now , and the only way i could ever rebuild is to sort out this debt now , while i am still young enough(relativley speaking !) 
But i do  take your point, believe you i am loath to let it go, but i want a fresh start.
Thank you for your advice


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## dub_nerd (8 Aug 2014)

If a property would only cover 10% of your debt, could you be a candidate for a PIA or bankruptcy?


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## Orga (8 Aug 2014)

Using your pension as security for a debt, unless in very specific and extremely limited circumstances, is not allowed.


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## Singer (9 Aug 2014)

Ask Ivan Yates what he did.  IMO if all it takes is living in the uk for a year or 2 then go for that option.


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## Trooper (14 Aug 2014)

What if the OP was offered a split mortgage? Would it make sense then?


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## Sunny (15 Aug 2014)

Trooper said:


> What if the OP was offered a split mortgage? Would it make sense then?


 
It's not a question of making sense. You can't assign your pension fund or use it as collateral.


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