Retirement dilemma

jm2153

Newbie to the forums here - I hope I've picked the right one ... if not be gentle with me and point me in the right direction please

Husband off sick and on half pay for next 4 months. Awaiting surgical procedure. Employers wont commit themselves as to if he can return to his normal job. If he can't then as he's 63 they'll probably retire him. Last pension forecast we got for him, a couple of years ago, said his pension would be about £300/month. We cant find out if his final salary pension scheme will pay ordinary retirement or ill health retirement. I bring in enough to pay the mortgage and have £50/month spare.

We have a fixed mortgage 6.39% with 3yr 7month years to run on fix, then about another 13 years, balance owing about £72k current ERC of 3.5k. We are overpaying as much as we can within mortgage terms and have about 50k in savings courtesy of a recent family death.

So how do we deal with/plan the finances of imminent retirement? Pay off as much mortgage as we can from our savings, sit on our savings? Somehow there must be a way to maximise our income in the long term and be able to claim things like rate rebate at the same time. Any inspirations or suggestions please?

Manual_Reversion

Bump. Sorry I can't offer any advice. There are far more knowledgeable people on this board who I'm sure will be able to assist.

EdInvestor

jm2153 wrote: »

So how do we deal with/plan the finances of imminent retirement? Pay off as much mortgage as we can from our savings, sit on our savings? Somehow there must be a way to maximise our income in the long term and be able to claim things like rate rebate at the same time. Any inspirations or suggestions please?

Typically an f/s scheme will pay a lump sum of tax free cash.This may help in reducing the mortgage. Get back to us when you know more about the retirment terms offered.

draughty

I applied for a second mortgage verbally on the telephone - all went well, plenty of equity etc., monthly income O.K., then because I was 75, I was told cannot obtain mortgage at 75 or over - is this age discrimination?

MABLE

draughty wrote: »

I applied for a second mortgage verbally on the telephone - all went well, plenty of equity etc., monthly income O.K., then because I was 75, I was told cannot obtain mortgage at 75 or over - is this age discrimination?

Possibly because you have exceeded your three score years and ten. Anything pass that is a bonus.

sleepless_saver

draughty wrote: »

I applied for a second mortgage verbally on the telephone - all went well, plenty of equity etc., monthly income O.K., then because I was 75, I was told cannot obtain mortgage at 75 or over - is this age discrimination?

It is age discrimination, but it is perfectly legal in the circumstances you describe.

exil

jm2153 wrote: »

Newbie to the forums here - I hope I've picked the right one ... if not be gentle with me and point me in the right direction please

Husband off sick and on half pay for next 4 months. Awaiting surgical procedure. Employers wont commit themselves as to if he can return to his normal job. If he can't then as he's 63 they'll probably retire him. Last pension forecast we got for him, a couple of years ago, said his pension would be about £300/month. We cant find out if his final salary pension scheme will pay ordinary retirement or ill health retirement. I bring in enough to pay the mortgage and have £50/month spare.

We have a fixed mortgage 6.39% with 3yr 7month years to run on fix, then about another 13 years, balance owing about £72k current ERC of 3.5k. We are overpaying as much as we can within mortgage terms and have about 50k in savings courtesy of a recent family death.

So how do we deal with/plan the finances of imminent retirement? Pay off as much mortgage as we can from our savings, sit on our savings? Somehow there must be a way to maximise our income in the long term and be able to claim things like rate rebate at the same time. Any inspirations or suggestions please?

Firstly, at age 63 there is virtually no difference between ill health retirement and early retirement in most final salary schemes.

Your best bet may be to apply for Pension Credit. You may get part or all of the mortgage interest paid if you qualify which from the figures you have given looks quite likely. Unfortunately your savings will affect the amount you can claim.

I'm assuming your OH will be able to get the state pension in a couple of years - and yourself as well?

If so your best strategy may be to keep up the mortgages until the state pensions kick in (claiming Pension Credit) and then use savings to pay off any outstanding mortgage. You should seek advice from Citizens Advice though.

exil

I suppose a 5 year old can't get a mortgage either, I guess that's age discrimination too!

Pee

If it wasn't for the current problems, I think RBS would shortly have started lending 5 x pocket money... maybe that would only have been suitable for rabbit hutches.

Pee

Have a look at what you are entitled to with the savings and with the mortgage paid off. I think from a benefits point of view you will be better off with the savings being used to repay the mortgage. That however does reduce flexibility, which might be particularly important for you at the moment.

chesky369

If your husand is retired at 63, his final salary scheme will still be a whole lot better than most alternatives at the moment. Very often, if people choose to take early retirement, there is a loss of 3 or 4% for each year taken but if the decision is made by his employer, it would depend on the rules of the scheme, so you might want to look at them - people are normally given a copy when the join a scheme - they then put it away and it's the last time they ever think to look at it.

When you speak of the pension forecast, did you mean the State Pension or the final salary pension. Also, how far off pension age are you?

If your husband did leave his job, he wouldn't be able to claim JSA at his age, he'd be encouraged to try for pension credit as he's over 60. But I think with a half-way decent occupational pension as well as his savings, he wouldn't be likely to have much success in claiming, particularly if you're still earning. So, you'd probably be best off paying off a chunk of your mortgage.