Debt in retirement

How would any of you on here like the idea of your state pensions frozen at 2006 rates? Thats what happened to me and DH after moving to Australia to be with our 3 children and grandchildren when we retired, even though we both had worked and paid NI all our working lives. It has been estimated that we save the British Government 14,000 pounds a year between us - benefits and NHS - actually it would probably be more as my husband now has cancer, and we pay all his medicals expenses privately. When we first came here we were getting around 8% interest on our savings, now we get 2%. We have definitely had to tighten our belts, but to be honest, its worth it - we could never come back to the UK - the way they treat OAPs is disgusting!!

Exactly, phoenix.

We are lucky enough (and dh worked hard) to have good pensions. But we have also been lucky enough not to fall ill and to stay together.

I feel really sad for people who, through no fault of their own, are facing a different retirement from the one they anticipated.

I don’t get what working hard has got to do with pensions ? If it was really about how hard you work DH and I would be bloomin’ retired millionaires .

Sorry I did not reply to both MOnica and Charleygirl yesterday afternoon - went out ! Yes MOnica, we are on propane gas ; last year was 300 euros a month but because we had an extra delivery late in December which threw us into the red, the firm decided we had to up our monthly payments in case we use the same amount this year. Hopefully we will economise and receive a rebate but still need to find this extra 300 a month until the end of the year.
When we are unable to drive there is (at present - who knows what the future holds anywhere ) a system of "femme de menage" whereby you can employ a person who does small jobs around the home, cleaning , washing etc. and who will drive you to the supermarket or do the shopping for you. In addition there are several good private , daily meals on wheels deliveries of fresh , not frozen meals.
We have family in Australia but realising the pension /health freezing did not consider that a viable option as our savings were not great.

Dharmacat thanks for that- it sounds really good. I am not sure what people do in this country if they are not computer literate and cannot order shopping on line. I found that invaluable after I had a knee replaced.

" However, our gas fuel has now increased to 600 euros (six HUNDRED) per month "
Dharmacat - we use propane too and pay in €s. Last year our supplier (Antargaz) made a big increase.
We contacted them and said we were changing to another supplier - eventually they came back with a much lower offer because we were "clients anciens" which at first I thought meant old people. But actually means long-standing customers.
Looking a comparative charts , they have 2 tariffs, one much lower than the other.
So try to bargain with your supplier. It wasn't easy though.

gilly in our case it has a direct impact on DH'S pension or did.

I'm sure you and your DH work hard and I feel so sad for you.

Reading this thread convinces me that life is a game of financial chance. We are comfortably off although I budget carefully having taken over our finances since DH had a stroke seven years ago and I guard our modest savings like a mother bear in the entrance to her den!!

My brothers are both very well off. DH often says he feels like we're the poor relations but I never see it that way because we have everything we need and a simple life has always suited me.

Gilly's right that it's not just about hard work. Nobody knows whether their years of hard graft will end in redundancy or divorce or fall victim to the effects of a recession.

I remember the old saying, 'Don't marry money but where money is.' every time I meet up with a friend who was an only child and married into a wealthy family with only one son. Apart from bringing up their children she has never had to work.

It seems some people are destined to be cushioned from the worry of precarious finances and some are not.

As I said on page 1, and was sort of pulled up on:
So much in life depends heavily on the hand we're dealt, however much hard work we put in and however much we try to plan ahead. Where and to whom we were born, family breakdown, bereavement, our health and that of our family, the sheer ruddy luck of being in the right place at the right time.

You can work your socks off morning, noon and night, but if life throws you a major curveball, you may still end up without that comfortable retirement you'd planned for. On the other hand, if you were lucky enough to be born into a wealthy and supportive family, you'll still be okay.

Exactly Maggiemaybe

I think much of ones retirement savings is down to frugal nature and hard work, but there is an overlay of pure luck. Luck to be in just right place at the right time and see the future of that place, luck to have good health and a good marriage.

Apart from trying to save, which is very difficult, I have been putting to one side items I have bought "for my incapacitated days" or "for later" if you prefer! For example, there was a really good sale of clothes which are good quality which I have worn for years, sale price plus another 33% off! So I bought several extra tops and pyjamas and put them in my "savings drawer". If I have to go into a care home my money will be used to pay for it and my needs for clothes will have to be met somehow. So it makes sense to buy now at this price than later at a much higher price when I do not have as much money. I do it with non perishable and long date household and food items, but to a lesser extent. So my "savings" are items not merely money.

At times I feel that my stock of cleaning and washing materials could outdo Sainsbury but I rarely pay full price and buy when items I use are a lot cheaper. I am a natural hoarder which does not help.

The sale of my house will have to pay for my care home fees (if needed) and after that runs out- who knows but by then I would think I will be beyond caring.

Just dipping my toe in the water here. We both retired in 2003, and I was worried about how things would pan out. I was lucky enough to have my pension paid from when I was 60. DH made what he thought, and was at the time, good provision for us with his pension plans, the along came the chancellor at the time and his pension pot was cut by half, as no doubt were many others. They just seemed to 'rob' them. So much for trying to forward plan. We do manage OK, and don't go short of heating or food, but don't splash out. Holidays take some thinking about. I get a very small work pension, that I had to fight hard for the company to contribute to, but so glad I did. We do have savings, mostly mine, but for us both. I would like to downsize a little, but property is so expensive here that it wouldn't be worth it. Also going into an apartment, there are yearly costs involved and they would increase every year to an unknown amount. So at the moment we are saying put. My heart goes out to folk like Gillybob and her DH, who have worked like billyo, done the right thing by their workers, and are now being penalised by their situation. Sorry if I have gone off the point.

"My heart goes out to folk like Gillybob and her DH, who have worked like billyo, done the right thing by their workers, and are now being penalised by their situation." This to be very true.

Auntieflo how did the chancellor cut your pension in half? You may be right, I just don't remember it and it didn't happen to us.

Nonnie, it was Gordon Brown. He took about £5 billion a year from the pension pots. Our largest was with Abbey Life and was cut by about 50%. I can remember DH's dismay.

we had ours cut by a ridiculous amount too ,so as soon as we could we took the rest out and bought property with it .With luck (fingers firmly crossed) our rents will make the same as a pension would have and the properties are rising in value ..albeit very slowly in this neck of the woods .Thats great for buyers of course so we shouldn't complain.Its difficult when you know you put all the right things in place and it still didn't work out .Like Gilly we decided to keep staff on after we sold part of our company ..until they could find other jobs to suit,some decided just to stay until all our sale money had been spent on their wages ..and THEN took us to a tribunal when we had to let them go.They won the tribunal ,apparently we should still have kept them until the business went under...Years later one of the women told us it was the best job she'd ever had and we were the nicest fairet bosses and if we wanted she would come back and work for us again tomorrow...! Couldn't make it up.LOL

We've just taken out equity release and paid up all our debts. Most of the rest will be spent on a new kitchen and doors. We've managed to reduce our outgoings substantially so we should be better off. And the doors get fitted next week with the kitchen in March.

We are fairly debt free. Redundant in 2013 and unemployed but with a small redundancy pension. Hubby at 9 years older gets his state pension. We manage but our adult children still ask for financial help. Its never ending.

I actually think many of the interest only mortgages are owned by B2L investors so not as bad as people may think. We have 3 on interest only with between 13 and 20 years left on them. We will sell as mortgages become due to supplement our Pension. Most B2L investors have interest only and this greatly distorts the official figures. We have spent a great deal of time and gone without many things our friends had like new cars, expensive holidays to invest for our retirement because when we are freed from shacked of work we want to be able to do stuff and travel. When we inherited we invested it to make it work as interest so low in banks. Did not just spend it like so many do. I can't get occupational pension for 3 1/2 (£7,500) more years and state pension (£146-£26) whilst contracted out, 11 years but dh younger than me and still working and his occupational pension so much better than mine but state Pension less as contracted out for longer. We will have repaid mortgage in 6 years. I agree divorce makes a big impact on finances paying for 2 lots of accommodation for over a year whilst we sorted finances took its toll and at point of divorce I only had 2 years left to pay mortgage and when remarried had to start from scratch again which was hard. No cc debt but we do have small loan (£11k) we took to buy property in France with no mortgage.

I totally empathise with you gillybob. I have just had my 70th birthday and am still working fulltime in a orthopaedic practice. I do have some savings, but they would vanish within a year if I had to tap into them. I've always worked, but never had a job with a pension at the end of it. I used to work in the NHS, but only on restricted hours and a few years ago you had to work a certain amount of hours to be able to join the pension scheme. Totally different now thank goodness. I've since worked for individual surgeons (for the last 20 years) and a pension was never on the cards and I couldn't afford to fund my own private pension as my son was at Uni and needed support. I too feel very uncertain about the future and how on earth I am going to manage. I am extremely frugal in my needs but still worry that I won't be able to manage on the state pension alone.

The ladies here who are unfortunate enough to only get the state pension - have you applied for pension credit and the local council for help with the council tax etc? I have no idea if you would qualify for any more payments but it must be worth a go. The Citizens advice might be a place to start.

newnanny, unfortunately the majority of interest only mortgages are held by home owners www.ft.com/content/4e0377e6-6ad4-11e7-bfeb-33fe0c5b7eaa Most of these mortgages were taken out in the heady period before the 2008 crash when many banks and building societies were lending recklessly.

In the past if you had an interest only mortgage (like we did) you had to take out an endowment policy and pay into it to raise the capital to pay the mortgage, and even those caught up with underperforming endowment policies , usually get enough to pay off most of the mortgage but in the first decade of this century the mortgage lenders dispensed with this requirement for IO mortgages to be tied to a capital repayment plan.

I have limited sympathy for these people. They all knew when they took the mortgages out that sooner or later the capital would have to be repaid and many of them took them out to get a bigger mortgage to get a bigger house and if their lack of planning. In the time they have had the mortgages, probably several decades, they have made no attempt to address the issue. Lenders have also tried to contact many of them to discuss the issue with them, but the majority have ignored these letters.

MOnica, we have an interest only mortgage and it needs to be paid off next July. We owe 206,000.
We also have 2 btolet properties and have just sold one to pay off our debt. Unfortunately we can’t pay it off yet or we would face a penalty equal to the interest payable for the next year. We are selling the house now as the tenant has just left and to avoid panicking next year.
We have had plenty of warning letters from the Bank but when I have tried to talk to them about our options (we would have liked to keep the buy to let, we own it outright) that say they won’t be in a position to talk to us until 3 months before the end of the term. Too late, IMO, to make other arrangements then.
I expect that we are counted in the figures but we will be debt free next year. There must be a lot of people like us so maybe the situation isn’t as bad as it is painted. Hope not.