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How to get a handle on debt, and head into retirement with a worry-free money horizon

7 minutes

Are you worried about money? Not planning ahead because you can’t face thinking about it?

Dealing with debt may feel overwhelming and things may feel out of your control, but the best thing to do is to take it one step at a time. And the good news is that being here, reading this article, means you’re already halfway there.

Let’s talk about debt

Discussing debt can feel like a taboo subject. And it is often assumed that someone's debt is the by-product of an excessive lifestyle. The truth is debt problems are usually due to unemployment and redundancy, which can happen to anyone, no matter how they deal with their money.

A recent separation from a partner, or an illness or injury that prohibits you from working may be another reason why you are struggling to pay your bills. Whatever the reason, we understand that adjusting to financial change can be difficult.

How does debt affect mental health?

Experts have established that there is a link between money and mental health. In fact, a study from the Royal College of Psychiatrists found that half of all adults with a debt problem also live with mental illness. It might help to understand how debt and your health are connected if you’re struggling.

If you find yourself in debt, bills start to pile up which can trigger anxiety and cause sleepless nights worrying about money. Affording the essentials you need to maintain a decent quality of life may be difficult. And loneliness and isolation can creep in when you find yourself unable to do the things others can. Ultimately, the main feelings surrounding debt can be guilt, fear, shame, and stress which will inevitably take a toll on your mental health.

Unfortunately, it then becomes a vicious cycle. Because if you are struggling with depression or feeling low, you may be unable to find the motivation to manage your finances.

You might avoid doing the things that will help you stay on top of your money because it may not feel worth it. While spending may give you a brief high when you are low, it will contribute to your problems. And so will poor mental health if you find yourself unable to work because of it.

Where do I start?

Burying your head in the sand and not dealing with debt isn’t going to cut it. But please know that when dealing with debt you are not alone. This is not something you have to figure out by yourself.

Begin by speaking to a debt advisor for free. Organisations such as StepChange, National Debtline, Debt Support Trust offer this advice, and are all charities, or not-for-profit organisations. You don’t need to pay anyone for advice about your finances.

And the Citizens Advice Bureau offers support and advice. They promise to be a judgment-free zone and assist you in managing your debts in ways you might not know about. To get support in your area, use Money Helper to find online, telephone or face-to-face appointments. Getting advice can help you feel less anxious, stressed, and more in control of your life.

However, it may feel easier to begin by talking to someone you trust. Whether that is a friend, relative or even a therapist, speaking with them will help you to feel less hopeless and alone. Ask them to help you make an appointment with a debt advisor or even come along with you if you need them to.

How do I plan for retirement?

It is important to look at your retirement options too. Similar to debt, it can be easy to avoid planning ahead because you don’t want to face the future and instead, just keep your fingers crossed. But with a bit of preparation and research, you can take the steps to ensure that you’re financially fit for life after work.

Backed by the government, Pension Wise also provides free, impartial guidance to over 50s regarding retirement. Their pension specialists will explain all your options as well as how each option is taxed and how to look out for scams. Take the next step and book a free appointment.

Pension Buddy has a Retirement Health Check calculator that will ascertain whether you are on track for a comfortable retirement or not. The checker will estimate the future worth of your pension savings and income, and then compare it to what you'll need for retirement. If we evaluate that there may be potential deficits, we’ll point you in the right direction to get you back on track. It only takes five minutes, so get started here.

The free Pension Buddy Plan is a very important part of the planning process. In just a few minutes we’ll give you all the information you need for retirement just by simply asking you a few questions. Packaged up as a free plan, the information is extremely manageable, served in bite-size chunks.

Don’t just ignore it

Whatever you decide to do when looking at your finances, the worst thing you can do is nothing. Talk to a friend or relative if you feel unable to do anything else. The adage about a problem shared really is true, and as soon as you fess up to someone else, you’ll find the next steps come more easily.

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