Debt in retirement

Seriously no apology needed. I have made some BIG mistakes in my life for which I have no-one but myself to blame.

I actually gave birth at 18 Jennifer (unknown to me at the time though I was pregnant at 17). (yikes)

Yes it was a massive shock to me and my parents who went ballistic. I had been a grammar school girl and let everyone down. My bigger mistake was going on to marry the waste of space father (a marriage that lasted all of a few months) .

Still I'm now 56 with a 38 year old son !

That should be apologize of course!

Well I can see that in your case gillybob it wouldn't have worked, but I was talking generally about most people.

Wow a baby at 17. I bet that was a shock to the system! I had my first child in my early 20s, and it felt such a grown-up thing to do when I didn't really feel like a grown up at all!
So lovely though now having such a small age gap between you and your eldest.

I think I did need to aplolgize if I sounded patronizing as that was not my intention at all.

I am one who has been fortunate. My parents were very poor, so I learnt to live frugally. I married a man whose vocational job was low paid. We lived within our means, and those far off days with small children were hard but incredibly happy. No tax credits in those days.
I returned to work, part time for a number of years, then full time, and built up a half decent pension.
DH moved into a different sector, so he too has a reasonable pension.
Mortgage rates were high, and our endowment led to a shortfall, but we were able to clear it with part of our retirement lump sums.
Because we have always lived frugally, and been fortunate in our health until recently, we now live comfortably ( though everyone has their own definition of that ).
I know not everyone has been as fortunate in how things turned out.

No need to apologize Jennifer however I don't think you quite get the point I was trying to make. I would have had to start "planning" at 16 to change anything in my life and would have had a hell of a lot to accomplish by the time I was 17 when I got myself pregnant. Sadly not a lot of luck since then (except of course my beautiful children and grandchildren). I have worked all my life and never had anything spare to invest in property as you suggested.

Yes of course I see what you are all saying about how none of us can foresee how our lives will pan out, but that was my point.

Misfortune can affect anyone, ill health, job losses, family crises, so surely that uncertainty is the very reason why we should plan ahead when we are young.
That way, we can build up (by whatever means) a decent nest egg to allow us to survive if disaster strikes.

I don't see how saying that is in any way patronizing, but apologies if that is how it came across.

You can plan all you like but a lot of it is down to serendipity or misfortune whichever you may encounter.

Exactly chewy

I'd like to add that those of us who did plan for our retirement, and saved into a monthly pension, didn't foresee that the Chancellor of the Exchequer would raid the pension pots and leave them almost empty. Undeterred, some of us continued to plan for our retirement but we didn't foresee that dishonest pension fund holders would bugger off with the lot and leave us with nothing at all.

Oh for the foresight and good fortune of JenniferEccles. Like gillybob, I'm glad you're ok though.

Whilst I have every sympathy for those who through no fault of their own, find themselves struggling financially in later life, I do feel that people should prepare more for retirement. We all know it's coming after all, but too many bury their heads in the sand I feel

I'm sorry to say this but I don't honestly think you really do have any sympathy or you wouldn't have wrote such a patronizing post Jennifer. Do you think we can all foresee the future? Could I foresee being left a single parent, not once but twice? Could I foresee getting MS ? Could my DH foresee almost dying of cancer in his 30's? Could we foresee DH losing his job because of his continued ill health? Did we foresee having to sell everything we had (house, pension, caravan etc) just to keep our small business afloat?

I strongly believe that investing in property is the way to go. Years ago we could see how prices were going up and up, plus we read about how strong the rental market was, so we took the plunge

I strongly believe you're probably right Jennifer but lets not forget that tiny stumbling block.....money.

Glad it worked for you though.

Whilst I have every sympathy for those who through no fault of their own, find themselves struggling financially in later life, I do feel that people should prepare more for retirement. We all know it's coming after all, but too many bury their heads in the sand I feel.

I strongly believe that investing in property is the way to go. Years ago we could see how prices were going up and up, plus we read about how strong the rental market was, so we took the plunge.

We worked out that if we bought a flat, the rental would cover the mortgage, even allowing for the odd void period, so we went ahead.

Yes it was scary - there was the risk that it wouldn't let easily, but we thought that if we renovated it to a good standard it would attract the best tenants who would look after it.

It worked out well, and over the years we bought and sold more. Yes, we had to ride out some property crashes, but we didn't panic and sell as we still had the rental income from them.

It was a gamble, and I did have a few sleepless nights in the early days wondering if we were totally mad, but it worked out for us !

Gillybob, don't despair, after retiring just over 7 years ago, we got into a bit of a muddle finance wise ( well me actually as I do all the financial bits and bobs). I was advised to approach StepChange Debt Charity, (Martin Lewis speaks highly of them), after chatting on the phone with someone, I was assured that they could help, which they do by you paying them an agreed amount each month, via Direct Debit, which they spread out among your debtors. That was 2013, we have now paid off half of the debt and are continuing to pay off the rest.
I must admit that the night-time of the day I made that phone call. I slept for the first time in ages, other nights it had been rolling around in my mind and driving me mad as to what we were going to do.
We were also advised to change banks, we changed to the Co-op bank and have had nothing but great treatment from the understanding staff.
I am sorry that I have taken so long to send this response in and hope that things are looking better for you as they are for us.

I do hate statistics sometimes as they can give such a false impression if people don;t know how to interpret them.If the average pensioner household has £29,500 some people think that average means most.This figure covers a wide spectrum of pensioners from those who have huge occupational and private pensions down to those who only have the state pension. I know people in both camps.A member of my family has two houses and a pension of around£70,00 and that excludes his wife's pension. Another friend has a similar sort of pension.They both had very senior jobs in the NHS. Then I have three friends who are all on the basic old age pension and two of them qualify for pension savings credit. We ourselves are just under the average, but are comfortable because we have no debt.

It can be older in some circumstances. I know some B2L mortgages will allow up to 80 years.

Is there an age limit when. It comes to mortgages? Years ago it used to be when you started getting your pension but then the BS told me that it could be later for people with enough pension to continue paying one.

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.

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.

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.

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.

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.

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.

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 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

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.

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.