Preparedness for when

elona

We got talked into an endowment mortgage over 30 years ago and DH was all for it. A few years later I did some sums to find out how much interest we would be paying over 25 years and still have the original sum to pay.

I showed DH my calculations ( he used to be a maths lecturer) asking if I had got it wrong as it looked as if we would be paying nearly four times the original sum in interest alone and still have to pay the original. After a lot of "discussion" we decided to retain the endowment but to repay the actual mortgage much earlier so that if it was such a good deal then the endowment sum was ours and we saved paying a lot of interest.

Needless to say the endowment came up short but at least we were not depending on it . I did similar calculations on various "offers" over the years and ended up paying cash we had saved up instead.

Frugalsod

Mojoworking wrote: »

Frugalsod I completely agree. I think people got into politics very quickly realise it's a cut throat business that serves the few and not the many and it is essentially a game of thrones. I've no idea how to change this bar voting green which feels like a wasted vote. Maybe Corbyn y will get in and I can vote labour again. I can't currently as essentially it was a choice of 3 tory parties.

That is the exact reasoning behind my voting Green as well. My thought was that it would give me an indication of who to vote for next time.

Frugalsod

elona wrote: »

We got talked into an endowment mortgage over 30 years ago and DH was all for it. A few years later I did some sums to find out how much interest we would be paying over 25 years and still have the original sum to pay.

I showed DH my calculations ( he used to be a maths lecturer) asking if I had got it wrong as it looked as if we would be paying nearly four times the original sum in interest alone and still have to pay the original. After a lot of "discussion" we decided to retain the endowment but to repay the actual mortgage much earlier so that if it was such a good deal then the endowment sum was ours and we saved paying a lot of interest.

Needless to say the endowment came up short but at least we were not depending on it . I did similar calculations on various "offers" over the years and ended up paying cash we had saved up instead.

You were not the only ones. There would be many people in a similar situation whose endowment policy was found to be seriously underfunded to if it were to pay off the mortgage on its own. Many were forced to substantially over pay from the new date onwards or switch to a repayment mortgage. Some had to do both as the endowment investment returns were serious lacking.

These are the same people who are running Britain's private pensions and they would also be seriously under funded if they used the same investment strategies. The solutions would be the same massive increases in pension contributions but no one is mentioning that because it would amount to a massive drain on the economy going forward.

armyknife

Frugalsod wrote: »

That is the exact reasoning behind my voting Green as well. My thought was that it would give me an indication of who to vote for next time.

Well if Corbyn wins the leadership, as a one nation pro-European heathite tory, I'll be joining his labour party; first time in a generation that a political party will have broadly similar policies to my, by now 'far left' politics.

Butterfly_Brain

A colleague of DH has just had to pay £30,000 off of her pension to pay for her house when she retired.
We have always had repayment mortgages, at least you can see the damn thing go down, but have been saving hard to get rid of it earlier.

moneyistooshorttomention

Blue_Doggy wrote: »

First catch your wild birds!

A common food for poor people in the south of England (probably elsewhere too) was sparrows, caught in a net while eating grain scattered as bait. When you think of the size of a plucked sparrow, you think how desperate the people were. I used to know an old man who had done this in the early years of the 20th century.

On the positive side, though, there's an end to type 2 diabetes and the obesity crisis!

On the positive side - no longer having access to antibiotics would probably also help with Type 2 diabetes. I gather there is now research that proves the effect of antibiotics on the "beneficial bugs" in our guts is one of the factors leading to this.

Hmmm...:think:. That particularly got me wondering because I'd had a few courses of antibiotics over the years and a couple of years back I was told a blood test had revealed I was pre-diabetic:eek:. Well, I've had a follow-up test to monitor recently and it came back clear and I'm fine:). What has happened in the meantime? Well - there may be a connection with the fact I've been having a pretty copious amount of kefir (ie beneficial bacteria)...

moneyistooshorttomention

Butterfly_Brain wrote: »

A colleague of DH has just had to pay £30,000 off of her pension to pay for her house when she retired.
We have always had repayment mortgages, at least you can see the damn thing go down, but have been saving hard to get rid of it earlier.

That was indeed one of the advantages of a repayment mortgage - and it was good to see capital being steadily repaid (if not at a very fast rate to start with). A big advantage was knowing that, any time I had a reasonable size bit of money spare, then I could/did throw it at that capital outstanding and repay some. That was one way to make sure I didn't waste my money and got good value for it:) - and it wasn't sitting there in savings (ie ready to be taken into account by the DWP should I ever have to claim unemployment benefit again):)

I can perfectly well believe the same people (ie those pushing endowment mortgages) were implicated in the poor performance of private pensions. My cynical nature meant I started worrying quite some time before the private pension fiasco stuff about how well my pension would be safeguarded and that was a very large part of why I decided to work in the public sector and make sure I had their pension as my job pension - as I knew that it would be a Final Salary pension and they would have to uprate it regardless and my inflation rises would be based on RPI (or CPI darn it...) and not dependant on how the stock market is doing and the like. There was no way I was going to trust how the stock market performed with the safety of my job pension...

jk0

Most of you know that I spend my days working on rental properties between lettings, so I guess it's not that strange that I should dream about it.

However, what I do find odd is that the property I'm working on in my dreams is not one that I own in real life. It is the 20th (top) floor of a 60's tower block, and makes me feel seasick by swaying when the wind blows. On occasion the lift has been broken, so I have been very pleased to have my BOB with some food in it.

I spent almost the entire night in this flat last night, even going to bed, and getting up again in the dream. I woke in real life around 3am and was pleased to remember that I did not actually own the place. However, I spent the rest of the night lagging the loft!

I would not dream of buying this type of flat in real life. Why do I keep dreaming about it?

Frugalsod

moneyistooshorttomention wrote: »

That was indeed one of the advantages of a repayment mortgage - and it was good to see capital being steadily repaid (if not at a very fast rate to start with). A big advantage was knowing that, any time I had a reasonable size bit of money spare, then I could/did throw it at that capital outstanding and repay some. That was one way to make sure I didn't waste my money and got good value for it:) - and it wasn't sitting there in savings (ie ready to be taken into account by the DWP should I ever have to claim unemployment benefit again):)

I can perfectly well believe the same people (ie those pushing endowment mortgages) were implicated in the poor performance of private pensions. My cynical nature meant I started worrying quite some time before the private pension fiasco stuff about how well my pension would be safeguarded and that was a very large part of why I decided to work in the public sector and make sure I had their pension as my job pension - as I knew that it would be a Final Salary pension and they would have to uprate it regardless and my inflation rises would be based on RPI (or CPI darn it...) and not dependant on how the stock market is doing and the like. There was no way I was going to trust how the stock market performed with the safety of my job pension...

The problem was that the banks and financial sector could see that these new products allowed them to rake in regular management fees and up front fees etc. Which is great for them it boosts their profits and the government could see that it would also raise tax receipts. Any problems would be someone else's problem, further down the line. It only took 15 years for the endowment scandal to ruin its customers. Unfortunately until the fines and penalties for selling such dodgy products exceed the profits these activities will continue as they will still be profitable for the banks and insurance companies.

Frugalsod

Butterfly_Brain wrote: »

A colleague of DH has just had to pay £30,000 off of her pension to pay for her house when she retired.
We have always had repayment mortgages, at least you can see the damn thing go down, but have been saving hard to get rid of it earlier.

Yes pension mortgage holders are due for a shock. While the contributions were tax deductible the investment returns have been lack lustre over the last decade and so I suspect that many people will retire with significantly smaller pension pots than they expected as a result of the poor returns and the outstanding mortgage.