Urgent advice needed regarding interest only mortgage and death

Sharne15

Flugelhorn said:

Sharne15 said:

LightFlare said:

You say she does not work - but can she ?

If so, she may need to. Does she even have NI contributions for state pension ?

My friend worked from 16 to 63 and gave up a stressful job as this was impacting her mental health so she will have NI contributions, I thought you weren't entitled to a state pension until you're 65/67 years of age??? At this moment in time, I can't see her going back to work for quite a while.

it sounds like she will have entitlement to state pension with those NI contributions but probably needs to check the actual forecast. She may be eligible for other benefits if unable to work owing to illness.

The IO mortgage is a problem though - monthly payments are probably cheaper than rent but somehow the money has to be paid at some point  - is there much equity to be able to downsize?

There is around £60,000 in equity so I think she may have a problem downsizing and her IO mortgage comes to an end in the next 6/7 years,

Ayr_Rage

@Sharne15 was there any plan in place to repay the capital at the end of the mortgage term?

silvercar

Ayr_Rage said:

@Sharne15 was there any plan in place to repay the capital at the end of the mortgage term?

Any plan may now be redundant. The couple may have been expecting 2 full state pensions to live on and so could use lump sums from private pensions to clear the mortgage. 

If she has been working, she may have a private pension somewhere, that may have a lump sum option.

Keep_pedalling

Sharne15 said:

LightFlare said:

You say she does not work - but can she ?

If so, she may need to. Does she even have NI contributions for state pension ?

My friend worked from 16 to 63 and gave up a stressful job as this was impacting her mental health so she will have NI contributions, I thought you weren't entitled to a state pension until you're 65/67 years of age??? At this moment in time, I can't see her going back to work for quite a while.

She can’t, but with 47 years of employment behind her I would have thought she would have been contributing to company pension schemes, which would give her some income and lump sums. If any are in place that start paying at 65 she might be able to start drawing them early.

Once she has establish the situation on her husbands death in service benefits and her own pension position she should contact one of the debt charities such as Stepchange to deal with her debt.

Keep_pedalling

Sharne15 said:

Flugelhorn said:

Sharne15 said:

LightFlare said:

You say she does not work - but can she ?

If so, she may need to. Does she even have NI contributions for state pension ?

My friend worked from 16 to 63 and gave up a stressful job as this was impacting her mental health so she will have NI contributions, I thought you weren't entitled to a state pension until you're 65/67 years of age??? At this moment in time, I can't see her going back to work for quite a while.

it sounds like she will have entitlement to state pension with those NI contributions but probably needs to check the actual forecast. She may be eligible for other benefits if unable to work owing to illness.

The IO mortgage is a problem though - monthly payments are probably cheaper than rent but somehow the money has to be paid at some point  - is there much equity to be able to downsize?

There is around £60,000 in equity so I think she may have a problem downsizing and her IO mortgage comes to an end in the next 6/7 years,

With £70k of debt on a £150k house it looks like downsizing or ER is not going to be the solution here. 

luvchocolate

Maybe sell property and clear mortgage. Look at housing association over 55s housing. 
Peace of mind 

Grumpelstiltskin

First thing to do is contact the mortgage company and ask for a break in payments explaining problem.

Any unsecured debts can go without paying until things are sorted.

She then needs to sort out any benefits, works pensions that may be around etc.

Does she have enough money for the funeral?

If she has any debts she is worried about apart from the mortgage get her to look at the debt free wannabe board on here, oh and get her to claim single persons council tax allowance ASAP and that may free up money till next tax year.

mattojgb

Sharne15 said:

LightFlare said:

You say she does not work - but can she ?

If so, she may need to. Does she even have NI contributions for state pension ?

My friend worked from 16 to 63 and gave up a stressful job as this was impacting her mental health so she will have NI contributions, I thought you weren't entitled to a state pension until you're 65/67 years of age??? At this moment in time, I can't see her going back to work for quite a while.

Would be a little surprising if she hadn't built up a company pension. Even if that doesn't normally pay out until 67, it should be possible to take it on a actuarially reduced basis (about 5% for every year rart) along with a lump sum.

Sharne15

Thank you all so much you have given me some great information which I hope will help her. You are all a great bunch of kind-hearted people xxx