A quick glance at the bank balance, let alone a credit card bill or mortgage statement, is enough to throw many people into a crisis. Money just seems to vanish. Whatever happened to the home you dreamed about? The bulging pension pot? The debts you want to get rid of? Here’s some of the major issues many of us face:
One way to lower monthly mortgage payments is by opting for a longer repayment term. Some lenders will do 35- or even 40-year loans, and an increasing number are prepared to lend well beyond retirement age.
Traditionally, many lenders would only grant a mortgage up to an individual’s planned retirement date – so for someone aged 45 who expects to retire at 67, that meant a maximum mortgage term of 22 years. But things are changing, and a number of building societies in particular will let you have a mortgage until you are 85+. In July, Nationwide upped its “maximum age at maturity” from 75 to 85, while the Halifax raised its maximum from 75 to 80.
If you are happy to live in a new-build, the help to buy equity loan scheme will see the government lend you up to 20% of the cost.
Taking a mortgage into retirement can have a big impact on your income, so it’s important to have a clear financial strategy to make sure you have enough to live on in later life.
Investing in a pension is important – don’t overlook it due to other financial commitments!
If you’ve accrued various money purchase (defined contribution) workplace pensions, CHN could get them to work harder for you. Bringing them all under one roof may make sense financially, and will make it easier to keep track of them.
Many pensions offer additional voluntary contributions (AVCs). If you can afford to, these could be one of the best financial decisions you make. The best AVCs see employers paying in as well as employees – for example, they might pay 50p for each £1 you put in.
When it comes to many credit cards, overdrafts and personal loans, people have racked up some serious debt. It can be harder to make more than the minimum payments at this time: In a sobering statistic, SunLife found that as a percentage of income, those aged 45-54 have more than half of their income allocated to fixed costs like these!
If you need independent financial advice then contact us using the online form, or call us on 0113 3878240.
Your home may be repossessed if you do not keep up repayments on your mortgage.