Will You Have To Spend Your Retirement Years Paying Off Debts?

I recently read an article saying that Prudential has released figures showing that 20% of people who retire have debts of more than £31,000. Many owe money on credit cards, interest-only mortgages or have endowments that have failed to deliver what they expected. Read the article here

debtsThose retiring now are being hit on all sides – and carrying debt over into retirement is highly expensive and can easily eat into the retirement income you thought you were getting, only to find you haven’t got.

The generation whose Endowment Mortgages have failed to deliver are left carrying the can as this combined with falling annuity rates is a lethal combination.

Equity Release Mortgages are an option, but an expensive one, as they erode the value of any inheritance planned to be passed down to future generations. Even the new flexible ‘interest payment plans’ should be viewed with caution and really are on option of last resort.

You can understand why the FSA and Lenders have toughened its stance with homeowners and interest only mortgages, failure to do so would simply have been supporting another future disaster of massive magnitude.

Interest only mortgages without payment vehicles to support them should never have been so freely given, but at least by making life hard for residential interest only borrowers today, they have the opportunity to take action, which could dramatically improve their futures.
Within my husband’s Mortgage Business, Alton Mortgages, we have seen first hand the pain and anguish of those who have been caught as a mortgage prisoner – too old to re-mortgage and yet no means of paying off the loan.

With annuity rates at an all time low, and predicted to fall further the pressure is to sort out your finances before you go into retirement.
Investing in property and using property as a pension is certainly a route to this, and a route that I advocate and use.

However it is imperative that there is a watertight plan to pay back the capital borrowed if you put your Investment properties on interest only mortgages, otherwise you simply run the risk of adding further fuel to the fire. The simple rule of ‘money borrowed has to be paid back’ is a simple rule unfortunately forgotten by many.

If you think that this could be you in a few years, or you are about to retire and don’t know what to do, contact me at Alton Property Partners and we can look at your situation to see how we can ensure you can retire in comfort with property as a pension.

Gill Alton

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Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors in the UK.

Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market.

The service is specifically aimed to support those who recognise the value of a UK investment portfolio, but lack the time, or knowledge to be able to invest for themselves because they are full time employees or Business Owners. With full consultation and comprehensive financial analysis, clients can be assured that their portfolio of strong yielding properties will be built to exacting standards and they will be kept up to date every step of the way.

Having been involved in property for 16 years Gill has built a personal portfolio for her family, and in addition to Alton Property Partners, runs a Property Mentoring Business, Venus Property Mentoring which focuses on supporting new investors onto the investing ladder. Having originally left the Corporate world to be a Qualified Mortgage Broker, Gill’s husband now focuses on their family Mortgage Brokerage in Maidenhead – Alton Mortgages.

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  1. Gill Alton | Securing Your Retirement With Property Part 1 - March 14, 2013

    [...] I recently read an article saying that Prudential has released figures showing that 20% of people who retire have debts of more than £31,000. Many owe money on credit cards, interest-only mortgages or have endowments that have failed to deliver what they expected. Read What I Think [...]

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