Debt in retirement

I totally sympathise with you Breda we are in a very similar position except we ploughed everything we had into keeping our small business afloat and pay our employees ( who I felt sorry for) . Despite the best advice to let it go . We just couldnt do it .
Never mind here we are . Working until we drop dead .

As you say Nonnie a ticking time bomb! I can see that measures may well have to be put in place to prevent people squandering their financial future but goodness knows what without great intrusion into people's private lives. I am sure that if they could do it they may well do so after the 'helpful headline hysteria' needed to ensure the right public opinion climate to achieve that end.

I am certain that this will get much worse because people really do not uderstand how much money is required to live with age related problems, ill health and accidents and the way in which costs are spiralling is pretty mind blowing.
I receive a small amount of state pension because I had to retire at 58 due to ill health but received nothing at all until I reached state pension age because I am married in spite of my acknowledged 'full contributions'. DH has an occupational pension as well as the state pension and fortunately for me is keeping all his promises in connection with 'in sickness and in health etc'
We had a small amount in savings and downsized to get rid of the mortgage as well as to make living easier but then had to borrow for unexpected problems with the new house but hopefully we will get rid of that in just over 3 years time. We manage ok at present but could have done without having to borrow for house repairs however we will be fine once we have cleared the loan. We borrowed from a family member as because of our ages we could not get a loan at a reasonable rate in spite of having a top credit rating and a guaranteed income. It would seem that loans, interest rates etc are totally skewed against older people. We use a credit card for purchases but clear it every month. We could seriously cut back if it was necessary but ill health has meant buying in help for the garden and house and it would be difficult to manage without that help.

Many of our own circle of retired friends already live very frugally in retirement with most money going on heating costs which are much higher in the UK than in many other countries. We feel that we are being treated as milch cows in that respect.
Our children do not expect to have a comfortable retirement with one of them convinced that retirement will never be possible at all due to inadequate income for the required savings. Another child does not expect health to hold up until the new retirement age with health already a problem 20 plus years before that date. The notion that the baby boomers have had it all is totally false as we can see that we are not any better off than our parents, the numbers just stack up in different ways. Inflation seems to be seen by some as a panacea for all ills but in reality is nobody's friend.

Talking about interest rates. When millenials are moaning about how lucky we are, all those cheap homes, we should remind them more often on what interest rates we were paying on our mortgages. If interest rates were 10 - 15% now, house prices would plummet, but be just as expensive (in monthly mortgage payments) as now.

Generally, and I emphasise, generally, I do not have much sympathy for those with interest only mortgages with no plans in place to pay off the principle when it is due. Most of these mortgages were taken out by people trading up in order to buy an even better house. They knew from the onset that the capital would have to be paid back sooner or later and if the price of the house they were living in went up, then so would cheaper houses, so they might well not be able to afford a smaller property. My sympathies are with those who took out endowment policies that failed to deliver, but that has been known for a decade or more so they did have time to make other plans.

My SIL is only getting child benefit for one now and that will stop soon- she has had 11 children so was far better off than I was and I was in a good job working full time.

Thanks MOnica for your input- she could easily have got a better paying job and is still only working part time. Her H thinks a full day's work is 4 hours so I think you get the drift in that family. I have kept quiet for many years!

That was my point MOnica, I think many will do just that and enjoy the money in their late 50s and early 60*. Ticking time bomb imo

charleygirl, the state will make up your SiL's pension up to £160 a week and while she will get help with rent and council tax, the system by which those on a low income, like £160 a week, get all the rent and CT paid has gone so some of that income will be going in rent and CT.

Sadly, some people despite all their own endeavours, cannot save much or any money and that is all they get but that someone, like your SiL, should choose to live on an income that small when they could with a bit of endeavour be more comfortably off makes my mind boggle.

I certainly remember paying my mortgage at 15%. Mine was an endowment mortgage because ibn those days a woman was lucky to receive anything from the building societies.

I was just divorced so it was not easy. but I had moved to a smaller property so the other bills were smaller. I was very very fortunate to be able to take my state pension age 60. It must be hell on earth having to work until one is ?67 and maybe not in the best of health.

My sister in law by marriage is under the impression that the state will keep her in her old age.

I was interested in that figure MOnica because I had no preconceived opinion and checked it out. Apparently most of the increase since 1977 is from private pensions which is of course good but I wonder what the future will be like when 55 year olds spend their pensions so they can live off the state in future.

£29,500 is fine if you have paid off your mortgage but it is only £14,750 per person so not so good if you still have a mortgage and live on your own.

We are very lucky to have no debts as we paid off our mortgage when I was 40 at the point when my OH had to retire on heath grounds - in order to survive we had to get rid of our mortgage, so we downsized when we still had 3 children at home. So, what seemed like a disadvantage then as we had a small home (and had to part with a home we loved), is to our advantage now and we are reaping the rewards in terms of no debt.

OH pension is small because of his early retirement; and I only have a small pension too as I missed out on contributions when the children were little. But I was lucky to have my pension at 60 and really feel for those whose pensions keep sliding further out of reach.

Our pensions keep us afloat; and we are expecting our application for Attendance Allowance on account of OH's PD to be successful and to help towards the massive heating bills that result from a very thin sedentary OH.

Both sets of parents left us some money so we have a small amount of savings, but enough to feel we could cover most eventualities should they occur.

So - a mixed life financially, but we are privileged to be able to manage now.

I think the devil is in the detail here.

This year is one of 3 peak periods identified by the FSA for interest-only mortgages ending. There's no indication in the report if this has any influence on the figures, only that nearly 40% of the people had a mortgage debt. There's also no indication if people have made any other provision to pay off the mortgage - so I have to wonder how much of the 'debt' can be offset against things like an endowment policy or a savings account.

It depends on how people are prepared for the debt too - it's not an issue if you're planning to downsize from a large family home into something more manageable. I couldn't see if this was unintentional debt or something that is part of a plan (live in a big house, only pay the interest on the mortgage, sell it up when the children have gone in 20 years time and buy again with the residual - that plan would have made for quite a luxurious retirement in some areas! ).

There's such a big difference between this and having £20k on high-interest plastic because you can't afford to manage on a pension.

Sorry, creditors

Fennel The debtor's have to whistle for it.

While I know many people are retiring on small incomes and I realise only too well how difficult that is for those involved, it is worth remembering the recent statistics from the ONS showed that the average pensioner household has an income of £29,500 and most of us are much better off than our parents or grandparents were in old age.

As for debt, one in five have debts, 4 in 5 don't.

I too have a state pension with a bit of SERPS that puts me beyond benefits - I get £8,850 pa. That is it. So at 71 I have a part time job with flexible hous, including doing some work at home, but I struggle with it and because there are times when I can’t think straight I take so long to do things that I only claim for half the time I actually spend on it. I can’t see me being able to do it much longer, then it will be goodbye to the car and hello to a very restricted life. My children live too far away for a day visit and neither has a spare room (but one has a very comfortable couch). Train fare (with rail card) to either costs two weeks food shop. (no coaches). I belong to a U3A and at least with a free bus pass I can travel to a few different places to wander round and maybe buy a coffee. I just hope my hips and knees last me out so that I can get out!

It will get worse, I am sure about that because of the changes in when people can withdraw their pension fund and what they can do with it.

At 55 it is easy to think that in your 70s you will be so old you won't need much money and will be able to live on the state pension but it is not true! We are fit and still very active.

I know someone who withdrew their pension at 55 and spent the lot so that the state will have to look after her when she is older and needs care. I very much doubt if she is alone. There must be many more who do exactly the same.

I retired early due to issues with my job but as we had paid off our mortgage we were able to live on DH's salary so I did not claim my state pension. At that time it was worth leaving it to accrue so that it eventually paid out a higher rate. Now I get more than the full state pension even though I did not have the full 39 years of NICs. Forward planning, even when it meant going without at the time was well worth it. I know not everyone can do this but those who can will have peace of mind.

We never had debts apart from a mortgage which we paid off 10 years ago. DH is 59 and I am almost 58 and we both have taken early retirement within the last 2 years. We both have good pensions investments and savings but we overpaid and saved hard for them so are comfortable now. We still managed to do holidays etc but we have never been unemployed or divorced or had periods if sickness luckily. I think if you have had to cope with any of those it is more difficult to keep out of debt

We have never had any debts other than the mortgage which was paid by the time my OH retired. He has his single state pension and two small private ones, he was self employed (building trade) for a few years so paid into one then and then worked at a private school and had another through that. I have worked mainly (and still do) part time so have no great amount to look forward to when I reach 66 - if they don't move it again.
If we had to rely on the state pension it would be a struggle, don't qualify for any benefits as we have some savings. Penalised like many for working and saving, will get nothing to help our heating or bills. If we'd spent every penny we would get rebates etc. Very unfair system.

this is for people from the USA
unfortunatelly it cant help those in uk
if you are
senior/on ss/disability.va pension(including survivors pension)
go here
www.helpsishere.org/

a law no one knows about
i am a 60 yr old on va survivors pension and qualified/these people are wonderful and knowledgable.they cant help with mortgage or bamk overdrafts but almost everything else

We too don’t envisage retiring at any point as we simply wouldn’t be able to afford to do so. Apart from state pensions which we don’t yet receive we will have no other form of income unless we carry on working. I have worked, albeit in a part time role, all of my adult life and my husband has worked full time but we never had the benefit of occupational pensions and frankly could never afford personal pensions as we never earned enough. We try very hard not to think about the future.

I do get a little bit cross when I listen to some people telling the world ‘how hard it is for them’and ‘it wasn’t this hard for previous generations’- it’s simply not true in all cases. Buying a house has always been difficult; we recall the incredibly high interest rates in the ‘70’s which crippled so many folk on modest incomes, and looking after a family is hard work and expensive but worthwhile.

Our biggest worry is becoming a financial burden for our children and I would be mortified if that should happen. Our aim is to keep going for as long as possible!

I think it is about expectations. My grandmother had and expected nothing. Today we see what others have and expect the same but unexpected financial blows are difficult to recover from. Equally women in their 60s have been dealt with very badly.

We are in the same position as gillybob, except we own our own house, after downsizing due to financial problems, but it's a very small house with a kitchen and bathroom that are falling apart and it feels like all our peers own larger properties and can afford brand new cars, holidays abroad and spend money on their children and grandchildren. Again it's no fault of our own, but my husband works in the construction business and since the recession when he was first made redundant he's been in and out of work, often on short-term contracts and when he's out of work we've had to draw on all our reserves to get through, which means we haven't been able to save and we're in debt. We don't tend to mix with friends any more. We can't entertain as we're too embarrassed and we don't know how we are going to survive old age as saving for a pension has been put on the back burner to survive. My guess is we will have enough pension to take us over the threshold for benefits, but not really enough to survive on. I also suffer from ill health, but not quite enough to qualify me for benefits. I find our situation makes me feel 'grubby' somehow, like I can't face the world.

Life is really hard for so many. We have friends who run their own small business a car cleaning company- out by 6.30am and not Home until 5.30pm at least 6 days @ week. It is hard physical work and outside in al, weathers. They are both in their 60s

They are both without any real skills so have never had the opportunity to be employed by a company which provides a pension, and they have never earned enough to have any savings. I suspect t although I don’t know that life was so tough at times that their NHI contributions are short of required necessary for the state pension.

I bet there are many like them.

I do sympathise with those who are struggling. I retired in 2014, earlier than planned due to a very stressful job impacting my health and no support whatsoever from my employers following a diagnosis of heart health problems. I have my state pension and two other tiny pensions, the sum total of which add up to less than £11,000 pa. Due to divorce in my 50's I have ended up in the rental sector and am lucky that I was allocated a one bed council flat when I was 60. I pay very little rent/council tax and I shall get the Warm Home Discount from my energy supplier, this year, for the first time, being over 65 and on a low income. I can't do holidays or evenings out, but do sometimes have a coffee in town with a friend and I do a little voluntary job on a Friday afternoon, which gets me out. Clothes come in the main from charity shops or Primark. In the summer I do try to have a couple of days at the seaside, using my bus pass, or the car, depending on the cost of parking! I have worked all of my adult life, paid all my tax and NI comtributions and so forth, however here I am, scraping by in retirement. My car is 20 and I do hope that it will stagger on for a while longer as it does at least mean that I can get out a bit, to see family and to volunteer. I do owe about £1200 on a credit card, plus I have a bank loan of just over £2000. I am paying these off at more than the minimum required just to try to be rid of them as soon as possible. Life is not all cruises and golden days...for many of us it is just a question of getting by somehow and hoping that things get no worse. I have my family and a few close friends locally, so I am fortunate in this respect, if not financially.

I also have to say I really object to being my husbands financial responsibility in terms of benefits etc. I worked for 40 years , paid my taxes etc and never claimed a thing but instead of being assessed on my own contributions its all about us as a couple.

So if an elderly couple both die, still in debt, mortgage or other. Even if they have a house to sell, that might not cover the debts.
So who is liable?