Pensioner helping kids with mortgage?

journo1_2

Hello, I'm a BBC journalist researching a piece about people who are coming up to retirement age or who are already retired, suffering from the triple whammy of a reduced pension because of the economic downturn, having to help their children to buy their own home, and whose own home is now worth less.... Is that you? If so please post on this forum as I'd like to get in touch... I can provide my BBC contact details for anyone who is interested. Many thanks.

dunstonh

I would think there are not too many people like that.

Those that are already retired havent seen their pension reduced.

The sensible ones and those with modern pension contracts would have seen their investment risk reduced in the years as they get closer to retirement and not been hit that hard from the market drops. Final salary schemes are not affected. That only really leaves you with the ones that failed to plan properly.

Parents more often than not help children fund home purchases, either directly or indirectly (i.e. furniture etc). That happens in good times and bad. The children buying a home now are laughing all the way to the bank.

So, I am not sure why you are calling it a triple whammy.

Paul_Herring

Perhaps, if you don't get too many takers, you might find this Guardian article interesting: http://www.guardian.co.uk/money/2009/feb/03/parents-lending-money-to-children

(As an aside, I thought journalists had to ask permission from Martin before posting these sort of requests, at least out of courtesy?)

Rafter

journo 1,

Anyone relying on their property value or share prices to fund retirement has other been misadvised or been foolish.

Most pension schemes worth their salt would have transferred the investments into bonds and gilts prior to maturity to protect the future pensioner from volatility in investment returns.

Everyone suffers in a recession. Those with assets see them go down in value. Those of working age see their income fall or jobs dissappear.

Savers cannot moan that they are losing out though. The 'real' return on savings when inflation is taken into account is rising at the moment. £100 in savings would be worth £95 in a years time with inflation at 5%. With inflation projected to be at 0% or even negative in the next 12 months. £100 now will actually buy more than £100 of goods in a year time.

The real trajedy is the younger generation though.....

Those who stretched themselves to buy houses at the height of the boom are now stuck in negative equity, and it is this group, or those graduating this year who will suffer the most from reduced employment.

The older generation have had spectacular returns on property which has turned out to be totally unsustainable. The correction is long overdue and should have happened 5 years ago - then we wouldn't be in this messy unravel situation.

R.

Robert_Sterling_3

dunstonh wrote: »

The children buying a home now are laughing all the way to the bank.

How wrong can you be?

dunstonh

Robert_Sterling wrote: »

How wrong can you be?

First time buyer looking at purchases around 30% lower than the peak. Mortgage rates lowest they have ever been and the ability to fix a long term rate way below the long term average seem like good things.

The recession isnt fun but they come and go. They are to be expected. In a typical 25 year term you would expect at least two of them. You cant have the good times without the bad.

journo1_2

Thank you all and apologies to Martin for not asking beforehand!