We’ve commissioned a guide to help readers plan for their future. As we become older, questions of debt and how it’s structured become arguably even more important. To learn more about Homes, Loans and Mortgages, and how they can affect the over 55s planning for retirement, read the third chapter of the independently written Guide to managing money for the over 55s, sponsored by free2. Or, tune into the Podcast series – free thinking finance – that accompanies it.
Guide to managing money for the over 55s – Chapter 3
Following the government’s reforms of 2015, known as “pension freedoms”, as we turn 55, many of us are now able to access our pension savings. It could be said that your financial options now both expand and contract; if you’re able to access your pension, you will have many choices before you, but once you’re 55 or over, numerous institutions begin to limit their offerings. Many people 55 and over may be focused on getting rid of any lingering mortgage debts, and holding onto as much of their savings as possible, as they plan for a more certain future. This is a time when people may consider clearing mortgages and loans in anticipation of a reduced income in retirement or just the feeling of being free from a lifetime of borrowing.
If you want to be mortgage free, how do you go about it? For some people, the obvious course of action might be to make overpayments and clear their mortgage as soon as possible in the run up to stopping work. But according to the expertly written Guide to managing money for the over 55s, commissioned by free2, simply making overpayments may not be a straightforward option. For example, some lenders penalise early repayments, and there may be other more expensive debts – such as credit card debt – that perhaps could be settled first.
So what are the options of raising capital to settle mortgage debts?
If you want to get mortgage free as soon as possible, then help is at hand, as the guide explores a number of options before you. However, for many, access to sufficient capital to repay outstanding mortgages is not a reality and they find themselves faced with limited options. For example, depending on your circumstances, you might be able to take out a repayment mortgage against your property to repay the debt. Or, perhaps you could swap out the debt into a lifetime interest only mortgage repayable on death. The guide also covers some of the more complex issues around Equity Release and how it can affect the amounts available to leave to family, and considerations around downsizing, along with the pros and cons for the over 55s of taking on an unsecured loan. It looks at how smart savers with spare pension income, could become smart borrowers without securing a loan against their home, as a way of leaving their estate, savings and pension untouched.
The Guide to managing money for the over 55s goes into these sorts of issues and many more, and is complemented by the Free thinking finance Podcast series, sponsored by free2. If you’d like to read more about these sorts of issues or listen to the Podcast, then please choose from the following options:
Free2 Limited (trading as free2) is an Appointed Representative of RS Consumer Finance Limited (RSCF) which is authorised and regulated by the Financial Conduct Authority (the FCA). free2 is a credit broker, not a lender, and will only offer loans from RSCF – an offer of credit is subject to status and affordability. Example Loan: 60-year-old non-smoker, £30,000 over 10 years with fixed monthly payments of £344.56, interest rate 6.73% and an APR of 6.97%. Terms & Conditions apply.