About to retire ... but in DEBT

Barnaby

Hello
I am desperate for help & advice from someone that I can trust & believe in.

From tMartin Lewis's web site MSE, television programmes & newspapers columns I can see he is very helpful & just such a person to whom I could believe & accept advice from.
I understand that he have asked that direct advice not to be sought via his email but I don’t feel able to list all my difficulties openly on the forum.

I’ll sum here my difficulties in case someone can help,
Simply put I am a 62 married man with a wife of 51 both living in a semi-detached mortgaged house with a high debt level.

10 years ago while I was in hospital I was made redundant, shortly after that my wife also became unemployed.
We are both back in work now but with considerable reduced earnings by approximately £10,000 to £12,000 per annum jointly.
This lead to us not being able to meet all our bills.
Our debt level then to all our creditors was in excess of £59,000.
I talked to Banks, CAB & the individual creditors but did not have much success.
Finally I contacted the Consumers Credit Counselling Service & they got a plan in place that was acceptable to my creditors. We have made steady payments and this has reduced our debt level to just under £49,000 as of today.

My concerns now are these:
Work may not be available beyond 65 but I have asked if I can stay in employment where I presently am beyond 65 which is their stated retirement age.
I also have to draw a pension on my 63rd birthday [24th March 2007] this was earned while in employment with Kodak Ltd for 25 years.
Clearly there is going to be a considerable debt still outstanding, however my endowment policy should just about clear the house mortgage but that doesn’t realise it value until 2013 and I need some income to keep paying the installments and mortgage.

Nobody has explained what will happen when I retire, will I be forced to sell up our house & or use my pension etc towards our debt.
I have tried hard to solve this but I don’t seem to find anyone who will move this on, they seem happy to leave me as I am.
Are there any alternative options for me.
Should I go down the route of bankruptcy or Individual Voluntary Arrangement [IVA] is there any advice any one can offer as I said at the beginning of this Martin Lewis is someone I would have faith in even if the advice was painful.
In respect of IVA's is my age against this too?

It is a mess & one I’m in desperate need of guidance on as I am not able to pursue this myself.
Please help.

Thank you for reading.

angelavdavis

Hi Barnaby and welcome to MSE,

Well done for posting.

Martin continues to send out his email newsletters (have you signed up to these?) but the majority of advice you will receive on here will be from other people who have been or are in similar circumstances to you.

I don't think I can answer all your questions, but I am sure more folks will follow who can.

Firstly:

Is your property in joint names?
Is your debt in joint names?
Is any of your debt secured to your property?
Have you been back to CCCS in view of your changing circumstances to seek any advice?
Have you considered downsizing your property to try to clear as many debts as possible?
How did your employer react to your request to stay on?

So many questions, so quite a bit still to do I am afraid.

I suggest you sit down, grab a cuppa and your bills/bank/cc statements complete your financial statement of affairs, guidance can be found in Southern Scousers sticky for newbies:
http://forums.moneysavingexpert.com/showthread.html?t=107280

Make sure you provide information relating to your debts including APRs, payments, terms, total outstanding whether secured/unsecured, etc.

Providing the SOA will help people here see what income you currently have compared to outgoings and hopefully highlight any areas where you could potentially save so you can throw more money toward your debts.

Good luck.

TTMCMschine

At 62 you've had probably at least 21 years of earning a salary by yourself, & maybe 25 years plus of joint earnings to carry you through life. At 62, you will soon be on much reduced income, so to be in this position this late in life when you've had decades to get yourself into a comfortable position is almost certainly too little much too late.

In addition, you will almost certainly see a severe shortfall from your endowment when it matures, & in the meantime you need to keep paying the mortgage & the endowment knowing it will leave you short in the end. This is on top of the other interest bearing liabilities that you have.

If you have been living in your property for a number of years then you will probably have built up a large amount of equity in it, so for me the best option is to sell the house, sell the endowment (NOT cash it), pay your debts in full & rent somewhere to live.

The English seem to have a peculiar obsession with "owning" property (even though in most cases it is simply renting at exhorbitant rates from the bank), but you have some tough decisions to make.

If you cannot service your debts comfortably now, & will relatively soon be retired with a reduced income, then you need to look at liquidising your assets now to pay down your interest bearing debts.

There is little point in taking solace from the fact that your house is worth "£x" if you are funding a repayment vehicle that will be short of the repayment amount in the end, & at the same time you have debts to pay that you can't meet. You are almost certainly walking into even more severe problems in the near future, and the interest payments will almost certainly outweigh any gains - particularly if the housing market resets to it's historic levels.

Any amount of money in the bank at even 3% would be better than debts & liabilities that are costing you any percent in interest. You would not own your own property in the end, but does that really matter? What will it do for you? If you have no money & are renting then you should be able to get help to pay the bills. If you have your own property & no money then you would have to sell it anyway & live off the proceeds.

In the end the only necessary things for a Human are shelter & food. It might seem to be a dull future if thats all that you have to look forward to, without the luxuries of life, but I can assure you that it will be an even duller future without them.



Sorry if it sounds harsh, but I think you need to make some serious moves now to avoid much more severe problems, worries, & heartache in the future.

Regards,
TTMCM

Barnaby

Thanks for the advice so far.
angelavdavis
Is your property in joint names? -- yes
Is your debt in joint names? -- for the purpose of cccs payments yes
Is any of your debt secured to your property? -- no
Have you been back to CCCS in view of your changing circumstances to seek any advice? -- yes but they seem stumped as what advice to offer.
Have you considered downsizing your property to try to clear as many debts as possible? -- yes but could I make a offer to clear individual debts at a reduced total or would they just sit on their hands knowing there is equity in the house.
How did your employer react to your request to stay on? -- still waiting for his reply, due a meeting this week. I'm hopeful that some year on year contract can be worked out.

TTMCMschine
Yes saddly all was ok just didn't expect the redundancy then only able to get re-employed at some £10.000 a year less salary. Getting made redundant in my late 50's was a real killer in trying to get a similar paying job.

I was wondering if I had any other options to just cashing in my assets now.
My wife at 51 still has some earning time left and I realise I have one shot at this.
I am trying to do something, anything that will give us a little quality in later life.
I'm trying to avoid paying all my debts off only then to end up on a Council housing list.

Thank you for your replies

savvykaz

VERY encouraging as ever TTMCM - NOT!!!!

You never post with thought to the individual's feelings, but say things with obvious arrogance. I have read many of your replies and note you changed your user id some months back (after others berated you).
Anyone can see some of the points you make but sometimes one has to consider the impact on the recipient. I have never bothered to comment to you before, but every time you offer 'advice' I find myself thinking "Another typical response from TTMCM"

It must be great to be so perfect

beanielou

Barnaby
Hi & welcome.
I would have thought that CCCS would be able to adjust the payments to reflect the reduction in income when it comes.
If i was you I would go back to them again & explain the situation again.

beanielou

Savykaz
The thanks button has gone for the mo.
Thanks from me.

TTMCMschine

savvykaz,
with all of the respect in the World, all of the {hugs} you can muster will not help the poster. He needs to take some definite action & needs to see things clearly & in perspective, so wrapping everyone in cotton wool is not always the best way to help someone.

Grow up.

CLAPTON

you really need to post more specific financial details...without knowing your incomes now and your spending and your debt details, value of house and mortgage and what your retirement (65) income is likely to be its only possible to make generalised comments.

Storm

Hi Barnaby and welcome to DFW :hello:

If you want to continue working past 65, then have a look around on DirectGov website and print off everything you can find on the new age discrimination laws to show to your boss. Unless you are physically or mentally unfit to continue working, then you cannot be forced to retire now, and a compulsory retirement age will be illegal.

How much are you managing to knock of the debts each month at the moment? If you keep working until 2013 when the endowment matures what sort of position will you be in then financially?

You may decide that selling up & going for a smaller house is the best option for you long-term, but whether this would be best now or when the mortgage is cleared is another question.

Have a look at SouthernScousers sticky at the top of the board & pop up a SoA, then we'll have a much better idea of what's what.

Storm

chevalier

Hi there
Welcome to the site. As Clapton says we can only offer general advice without a statement of affairs.

However you can give yourself a finance check and do the following
1) Check that you are with the cheapest utility supplier for gas and electric. Use https://www.uswitch.com to do the comparisons. If your current supplier is not the cheapest, then hang on for a couple of weeks, as not all suppliers have reduced their prices, then check again.

If you can get gas/electric cheaper with another supplier, sign up to https://www.quidco.com, and see if your prospective new supplier is doing a cash back deal.

2) Do the same for things such as buildings and contents insurance, life insurance, car insurance. Always check via quidco, as some of the insurers are offering £100 cash back on the policy. All money to save towards a lump sum payment to CCCS.

3) Will your endowment not perform? If so there are template letters on this site (not sure where, have a look on the mortgage board), to try and get compensation. For many people a simple letter, has got them back a fair amount of money.

4) If you have been in debt a long time ,then have you been charged bank charges? If so you can claim back the last 6 years worth from bank/credit card suppliers. Have a look at https://www.consumeractiongroup.com, for information, and template letters.

5) you say you have to take a pension at 63 from a previous employer. If you don't REALLY need it now, can you defer it? I believe that this would get you a bigger monthly sum when you did take it later. But check with the pension provider about this.

6) There are many sites on the web, that offer cash for doing things such as surveys. These give you points, which you can later change into money or vouchers. The ones I have experience of are
https://www.quidco.com - for click throughs (no spend) and getting cash back as above on every day purchases (eg I spent £40 at Boots on line, and got 6.5% back as cash back)
https://www.mutualpoints.com - get points for doing searches, and also for signing up for new letters. 3000 points gets you £20
https://www.yougov.co.uk - survey site that pays money.
https://www.caio.co.uk - another survey site that pays money
https://www.lightspeedpanel.com - survey site that gives you points which convert into vouchers. 500 points is £5.00

All these are things you can do in the evenings to earn money from home. And of course both you and your wife can sign up to the survey sites.

There is also mystery shopping. If you do a search on this forum (type in myster shopping at the top), there is a thread which gives the names of loads of mystery shopping sites. You judge a shop or restaurants customer service, they refund your expenses, plus a bit on top.

Sorry this is so long, but I just wanted to try and show you that there are things you can do NOW, to help you feel more in control, whilst at the same time potentially cutting your outgoings, and increasing you income a bit.

Best of luck
chev