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Balancing pensions and debt

If you have debt to manage, putting money into your workplace pension might not seem like a priority - but there are benefits to paying both at the same time.

Why should I balance a pension with my debt? 

You might be surprised to know that many people continue saving while they're borrowing. That's because juggling debts like long-term mortgages and temporary credit card bills with workplace pension contributions is an effective way to manage your money in the long-term.

Paying into a pension means your pot could benefit from employer contributions and tax relief from the government. The long-term effect of having any returns earned on your savings reinvested over time, will also help your money to grow. So if it's possible for you to balance both, it can be a clever way to save a lot more money than you personally put in.

It’s all about what works for you

There’s no right or wrong answer to how you balance a pension and debt. It comes down to your personal priorities for your finances and your future.

If, for example, you find yourself borrowing to afford the basics in life, you might decide to focus on debt repayment for a while and pause your pension contributions until your finances are in a better position.

With Nest you have a single retirement pot for life so if you do start saving again after taking a break, your money will be in one place. You'll just need to tell your employer when you're ready to carry on making your contributions.

Alternatively, you might be able to easily manage paying off your debt in instalments while paying into your pension pot each month. Just remember that if you clear your debts and can pay more money into your pension, this is a great way to save for your future.

Help and advice

Whatever you decide when it comes to debt repayment, there are plenty of resources to help you on your way.

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Free budget planner

The Money Advice Service's budget planner makes it easier to stay in control of your household spending and money.

Use the budget planner

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Getting guidance and advice

Feel confident about your finances by knowing where to find the information that’s most useful to you.

Where to find support

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Log in to your online account

You can check how much is in your retirement pot, change your contributions and much more by logging in to your online account.