One in five retiring this year have debts of over £33,000

Percy1983

From my parents financial performance I can believe this, they bought at 25K and now of 36k to be paid over the next 9 years (when my dad is 65).

With that the cycle has been run up debts, add to mortgage, run up debts, add to mortgage.

So now my dad says his mortgage payments are too high, so he is running up more debts.

In short I am not expecting anything in inheritance as the cycle doesn't seem to be stopping.

As it is my life is setup to continue without inheritance so anything will be a bonus rather than needed... my brother on the other hand could really do with something to buy a house.

Jowo_2

I recall a thread on the housing forum where a son was desperate to find a way out of his parents having their property re-possessed at the end of the mortgage term as it was interest only and they had no means to pay the balance. AFAIK, the parents were not employed, the father was sick and they couldn't find anyone who would re-mortgage it. They'd apparently transferred it onto an interest only mortgage years before and had re-mortgaged it to send their son to private school. The son couldn't get a mortgage on it because of university debts, I think.

Interest only mortgages without an investment vehicle should be banned. Homeowners should be obliged to take out sickness and unemployment cover to insure them against defaulting on their mortgage. The benefit forum is chock-full of homeowners on the SMI scheme which means they can tread water for years without paying anything down on their mortgage, just stagnating.

evenasus

ceridwen wrote: »

You've now got me wondering what year endowment mortgages came onto the scene - as there must have been a "credibility gap" time during which no-one much had yet realised they werent going to "deliver the goods".going to "bomb"?

I guess we should count ourselves fortunate. We took out an endowment mortgage in the 70's.
When it matured 25 years later, not only did it cover the mortgage - there was a nice £8K paid into our current account too.

We are both retired and have substantial savings and no debts.
We even managed to pay off my son's mortgage.

We've never won or been given any money - it's all hard worked for savings.

diable

ceridwen wrote: »

I had wondered whether an element of people being in this situation might be helping out children even after they have reached adult age.

If I had wanted/had children I would have had them at an age where they would have reached 22 before I reached retirement age - but if people have had children at an older age than the one I would have decided on then they might not have "flown the coup" fully by retirement age. I never envisaged helping adult children with buying a house - so I don't know if that is where the problem lies in some cases (ie people are helping adult children with house purchases - at the detriment of retiring on time debtfree). I tend to think in those cases that I would have said "I want to help - and would, of myself, but its impossible for me to do so AND retire on time. So I'm afraid the only help I can give is that I'm still living in the childhood home, so you can stay living here for longer than we both expected whilst you save up - and, some time later, you will inherit the childhood home. I'm afraid I'm unable to change my plans for retirement - as I simply can't stand to continue working on."

I can understand people working on if they are fortunate enough to have a job they actually like or have nothing much else they want to do and their job is "tolerable" - but I wonder how many people are even in position 2. I would imagine most people are too busy/too ill/too harassed at work to work on and it therefore surprises me that people would accummulate debt to help out adult children in those circumstances.

I do feel sorry for those who divorce later on in life and struggle to get themselves suitably set up on the housing front to be able to have a home for the rest of their lives.

I am 47 and my children are now 24 and 22 hopefully in the next few years I can help them a little bit more then I can now.

tanith

I have also never envisaged helping my adult children buy a property , my parents were never in a position to help me financial and it was never expected. I divorced at 41 , started from scratch with a new partner/husband and now 20 odd years later we are fortunate that our mortgage will finish in time with OH retirement in a few years. I have no intention of using our hard earned savings to give my kids a leg up or use my equity in anyway to their advantage, OH and I have worked hard for what we have and intend to enjoy the next years as health and wealth allow. When we are gone there may be something left for our families but if not then so be it... my children aren't expecting anything and are making their own way in the world not relying on a me to supplement them...I think children who put that burden on their parents should think again and make plans that don't involve money coming from an inheritance that may or may not materialise.

EDIT: There certainly won't be any debt either when I go..

evenasus

tanith wrote: »

I have no intention of using our hard earned savings to give my kids a leg up or use my equity in anyway to their advantage.

It gives me far more pleasure to spend on my son and his family, than it does spending on myself.
Saying that, we never deny ourselves anything we want.
Also, if we don't buy things/give money away now, the tax man (inheritance tax) would rub his hands together.

tanith

evenasus wrote: »

It gives me far more pleasure to spend on my son and his family, than it does spending on myself.
Saying that, we never deny ourselves anything we want.
Also, if we don't buy things/give money away now, the tax man (inheritance tax) would rub his hands together.

I assure you that the little I have including our house will not take me into I/T territory.. and just because I don't give my kids thousands for houses doesn't mean I am not generous when it comes to other things..:D

Emy1501

If I remember rightly a large percentage of the people using the government scheme to assist those who could not pay their mortgage were of retirement age. I remember being quite surprised at the time.

I suspect more and more will reach retirement age in debt with the idea that downsizing equity release schemes will be answer.

evenasus

tanith wrote: »

I assure you that the little I have including our house will not take me into I/T territory.. and just because I don't give my kids thousands for houses doesn't mean I am not generous when it comes to other things..:D

Sorry tanith, if you took my post as implying that you were mean, I really didn't intend that.

I was just stating my own personal situation.