Five years to retirement - help!!

SadieM_2

Hi Guys, I've been reading the forum over the last few days and it has helped me enormously to know that I am not the only person in this age group in need of debt help. I will be 59 next week and my husband will be 58 which means retirement is looming in the next five or six years. We currently have debts, excluding the mortgage, of around £55K of which £17K is a bank loan and the rest on credit cards. The debts have been caused by changes in jobs due to redundancy and lower salaries but also through our complete stupidity. I feel really embarassed by it as I feel at our age this is not a situation we should be in. At the moment we haven't defaulted on anything but our basically robbing peter to pay paul and are only paying the minimum on our credit cards. If we manage to keep this goining for the next few years we will still have the bulk of the debt when we reach retirement and there is obviously no way we could meet these payments out of an old age pension.

This is giving me so many sleepless nights, I would appreciate input from anyone who is in the same boat. Do we do something now or as we are meeting our payments at the moment are the credit companies likely to dismiss a DMP offer.

Thanks for reading this, I look forward to some replies.

Tixy

Hi

It would help to see a statement of affairs to see your financial position clearer. If you can only meet your minimum payments by re-using credit elsewhere then it might well be possible /suitable to do a DMP. Although you would need to consider where a DMP will likely leave you when you retire.

Whilst you may feel you have left it late to start sorting your finances its better to tackle it now than wait until you actually have retired.

If you can complete this and post it on here it would be useful - http://www.makesenseofcards.com/soacalc.html

Do you have private pensions/local govt pensions at all that will pay a lump sum on retirement?

SadieM_2

Thanks for such a quick response. I will update a statement of affairs tonight and forward it on. With regard to pensions, I will only have the state to look after me and we really don't know what my husband will receive. He had paid into a pension for 25 plus years before his employer went to the wall and as it was before the Government put the safeguard policy in place we have absolutely no idea what he will receive which doesn't help.

SadieM_2

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1670
Partners monthly income after tax....... 1700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3370
Monthly Expense Details
Mortgage................................ 1406
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129
Electricity............................. 55
Gas..................................... 45
Oil..................................... 0
Water rates............................. 53
Telephone (land line)................... 20
Mobile phone............................ 25
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 30
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 125
Contents insurance...................... 125
Life assurance ......................... 61
Other insurance......................... 26
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 2185

Assets
Cash.................................... 0
House value (Gross)..................... 165000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 167000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1406).....5
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................9700......204.......0
Credit Card....................8500......170.......0
Credit Card....................7500......145.......0
Personal Loan..................16500.....345.......0
Credit Card....................8500......165.......0
Creditt Card...................8500......165.......0
Total unsecured debts..........59200.....1194......-

Monthly Budget Summary
Total monthly income.................... 3,370
Expenses (including HP & secured debts). 2,185
Available for debt repayments........... 1,185
Monthly UNsecured debt repayments....... 1,194
Amount short for making debt repayments. -9
Personal Balance Sheet Summary
Total assets (things you own)........... 167,000
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -59,200
Net Assets.............................. 12,800




I hope you can read this is seems to have come out a bit wobbly.
My husband really isn't happy with the idea of a DMP but it may be the only way. Any ideas and help much appreciated.

McKneff

Well Done for posting this - just some thoughts.

Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1670
Partners monthly income after tax....... 1700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3370 wow, luck you.
Monthly Expense Details
Mortgage................................ 1406
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129 Try asking to pay over 12 months and not 10
Electricity............................. 55 Try for a cheaper tariff
Gas..................................... 45 Same again, £100 a month for 2 is OTT
Oil..................................... 0
Water rates............................. 53 Get a meter, instant savings.
Telephone (land line)................... 20
Mobile phone............................ 25
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 30 Shop around. I have a new car and pay £200 pa.
Car maintenance (including MOT)......... 30 £360 a year, surely not.
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 125 Is this per month, i pay this per year
Contents insurance...................... 125 Ditto.
Life assurance ......................... 61
Other insurance......................... 26
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 2185

Hope that helps,

pennypusher

Hi, well done for posting your SOA. Will your mortgage be paid off when you retire? You could go PAYG for your mobiles and cut them down a bit.
You need to budget for groceries. Also petrol, car tax and insurance. You need to put in something for presents and entertainment. Your insurances need to be divided by 12 to give your monthly cost.
It would be good if you found out the apr's on your cc's and loan and paid off the one with the highest interest first.
Hope this helps.

zarazara

SadieM wrote: »

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1670
Partners monthly income after tax....... 1700
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3370
Monthly Expense Details
Mortgage................................ 1406

---

seems high,can you downsize or rent instead?
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 129--high
Electricity............................. 55--high shop around for providers
Gas..................................... 45--ditto
Oil..................................... 0
Water rates............................. 53---think about a meter
Telephone (land line)................... 20
Mobile phone............................ 25---reduce to £10
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0----dont you eat?
Clothing................................ 0----no clothes?
Petrol/diesel........................... 0
Road tax................................ 0

---

no tax disc?
Car Insurance........................... 30
Car maintenance (including MOT)......... 30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 13
Buildings insurance..................... 125---are you sure?
Contents insurance...................... 125---ditto
Life assurance ......................... 61

---

eek!
Other insurance......................... 26
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 2185

Assets
Cash.................................... 0
House value (Gross)..................... 165000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 167000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 95000....(1406).....5
Total secured & HP debts...... 95000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................9700......204.......0
Credit Card....................8500......170.......0
Credit Card....................7500......145.......0
Personal Loan..................16500.....345.......0
Credit Card....................8500......165.......0
Creditt Card...................8500......165.......0
Total unsecured debts..........59200.....1194......-

Monthly Budget Summary
Total monthly income.................... 3,370
Expenses (including HP & secured debts). 2,185
Available for debt repayments........... 1,185
Monthly UNsecured debt repayments....... 1,194
Amount short for making debt repayments. -9
Personal Balance Sheet Summary
Total assets (things you own)........... 167,000
Total HP & Secured debt................. -95,000
Total Unsecured debt.................... -59,200
Net Assets.............................. 12,800




I hope you can read this is seems to have come out a bit wobbly.
My husband really isn't happy with the idea of a DMP but it may be the only way. Any ideas and help much appreciated.

It could be a good idea to sell the house,pay your debt and rent. See Citizens advice ,they are usually helpful.

SouthCoast

Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0

?

Do you have stuff to sell on eBay or at car boots?

SadieM_2

Thanks for all the replies. I obviously have made a couple of booboos. The Insurance and Buildings Insurance I put in is the annual cost not monthly and this is up for renewal in December so I will be shopping around. The car insurance figure also covers the RAC and we did look at all the websites before we found this one.

Foodwise, I try to keep it to a max of £50 per week, luckily we are on a diet, it was voluntary, but is now becoming enforced!

Before I posted this last night I had spent an hour putting things on ebay and my eyes had started to meet in the middle hence the stupid errors. Unfortunately my old laptop blew up last week and I have had to borrow a friends netbook. Good little machine but you need fingers like matchsticks to hit the keys and 20/20 eyesight.

Our mortgage has 7 years to go on it, I will be 66 by then and my husband 65. I have thought about selling the house but it isn't a particularly big place and by the time we had paid solicitors/moving fees etc we still wouldn't have enought to pay everything off and we wouldn't have anywhere to live, so not really an option. We also have a dog and 3 cats, yes that's a bit over the top, but everyone has a story to tell about the people who mistreated them or kicked them out, and so renting would not be an option.

But thank you everyone for taking the time to look at this and keep the ideas coming please.

pure_dead_dopey

Hi Sadie

MyOh and I are in a similar position, loads of debt and nearing retirement. We entered a DMP at the beginning of the year and it certainly started to sort out the mess. It is very difficult and I understand totally that you want to be able to retire without this all hanging around your neck, you also want to protect your house and live some sort of life. You need to try to sort this now, cos the bald fact is that you are running out of time. There are various things you could look at but the most improtant thing is to get OH on board, this isn't going to be sorted without some collateral damage to your credit record. If you manage to stagger on to retirement, paying the minimums, you will then be on a reduced income, still with the debt and the minimum payments will possibly be out of reach, you've still got time but you have to do something soon. I would look at a DMP, you've got good salaries and can pay a good chunk to the DMP, if your creditors stopped interest, this would certainly help to get that total down. Unenforceability might also be an option, depends how old the cards are, anything pre 2007 could be unenforceable but it is not an easy option and again, credit is trashed. I have just one more question, is your mortgage on interest only or repayment, if its on interest only have you got something in place to pay it? If not that's going to be your number one problem. The great thing about these boards is that you are not alone, and there will be a solution, we just have to look a bit to find it. Good luck and keep posting.

NorthernLas

Sadie - If you put estimates in your SOA for food, petrol etc. you will have a better idea of how much you need to make up each month.

A spending diary is a good idea so that you can identify what you really do spend in case there are things that you have missed.

When you swap utilities, consider using sites like topcashback or quidco.

You could also put your details into CCCS on-line debt remedy and see what advice is suggested.

Depending on the age of your credit cards you may consider looking at enforceability (also depends on whether you intend to re-mortgage as it will damage your credit rating). This might be seen as controversial, but it is worth considering all options.