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Tackling your debts

Dealing with debts in retirement in Scotland

Posted 21 March 2013

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There are a number of ways you can deal with your debts in retirement, from budgeting properly to professional debt solutions.

Retirement is a time to look forward to for most people. However, if you still have debts to repay, you might be wondering how you can deal with them when you stop earning.
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Here are a few things you can do if you're retired and you want to pay off some (or all) of your debts.

Check you're claiming everything you're entitled to


People over the state pension age in the UK are entitled to a number of benefits - and you might not be claiming all of them. This benefit calculator could help you figure out whether you're claiming all the correct benefits.

It's also important to ensure that you've not forgotten about any pension schemes you took part in in the past. If you think you might have lost track of some of your pension arrangements, visit this page.

Debt help for pensioners


If you've checked you're receiving all you're entitled to and you still can't afford to repay your debts, you'll need to seek professional debt advice as soon as possible.

A debt adviser can talk you through your situation and help you find a way of getting back on top of your finances. It may be that you can arrange an affordable repayment plan, or there may be other help available. Either way, the sooner you seek help, the easier it should be.

Will I have to use my pension savings to pay my debts?


When you take a lump sum out of your annuity, you may choose to use a portion of this to repay your debts. It may be sensible to do this if you want to get your debts out of the way quickly so you can enjoy a debt-free retirement. Bear in mind that your lenders may ask you to pay them out of your lump sum.

It may also be a good idea to look how much you can afford to pay towards your debts out of your pension income.

Remember that your lenders can ask you to make payments to them out of your lump sum and your pension income - but they can't access 'the pot' itself.

by Kyri Levendi

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.