In most cases, staying in a workplace pension after being automatically enrolled makes sense. But if you have debts that aren’t comfortably under control, you should think about paying them off first before starting to save for retirement.
Think twice if your debts are a problem
It’s common for people to save and borrow at the same time – for example, making pension contributions at the same time as paying off a mortgage.
But if you find yourself relying on borrowing to make ends meet each month, then getting on top of your debts should be your first priority.
Automatic enrolment is a great way to start saving for your retirement, but if you’re struggling with your borrowing, then it makes sense to think twice.
Use our Automatic enrolment advice tool to get guidance tailored to your circumstances.
Remember that you can always opt in later to your employer’s workplace pension scheme if you decide to pay off your borrowing first.
If you get into the habit of setting aside a sum each month to pay off debts, you could just carry on setting aside the same amount once your debts are cleared but diverting it to your pension instead.
This article is provided by the Money Advice Service.
