Mortgage, DMP and Looming Retirement

tigergambit

I kinda have a plan for this but I would be grateful to hear what people think. 

Scenario
I'm 62, due to retire in Dec 2029 - only 4 1/2 years. We have a mortgage, 42k at 1.59% fixed until August 2026. I have 3 creditors Tesco, PRA, Sainsbury's, totalling £18k.
We will both get full state pensions, but we have drawn down on private pensions so no more lump sum available.
We have a lovely home which is valuable but very cheap to run and we don't want to downsize just to pay off creditors. 

Problems
Biggest worry is the Mortgage and coming end of deal. I have had a look on lenders website and we would have difficulty getting another deal for a low amount. Mortgage ends in 2031 but I am averse to letting it run into retirement and am overpaying. 
Creditors - I  am currently paying £1 each per month which they are all content with. I look on this as an interest free loan. I have cleared unsecured debt down from £52k using F&Fs. Have offered this to these lenders but they don't want to play so they can have their £1 per month until I die. What will happen then?

Savings
I have a few thousand in savings that the creditors are unaware of. Not masses but enough to cover emergencies.

Strategy
So current strategy is to use any spare cash, bonuses, etc to hammer down the Mortgage, pay as little as possible to creditors (who really don't seem to care, so why should I?) and live life.

Is this reasonable or am I kidding myself / totally crazy?

Keep_pedalling

Seems you are a can won’t pay sort of guy, otherwise you should be paying down the expensive debt not your cheap mortgage. 

Grumpelstiltskin

OK So we really need to know details of your debts. How much? Who with? How old are the debts? Have you ever requested CCAs?
That will do for a start.

fatbelly

I think you are correct to prioritise secured debt.

It worries me a little that you are talking about retiring in 2029 but the mortgage does not complete till 2031. 

I think you will have to review that decision. You cannot be forced to retire at state retirement age, which I assume for you is 67.

TheAble

Agree focussing on the mortgage is the right approach. The bank might agree to extend beyond 2031 but there's no guarantee on that, so you want to make sure it's paid by then.

Retiring in 2029 might be ok as long as your pensions will cover the mortgage repayments and any other essential outgoings.

tigergambit

Keep_pedalling said:

Seems you are a can won’t pay sort of guy, otherwise you should be paying down the expensive debt not your cheap mortgage. 

I also have quite severe Asperger's. I have no idea whatsoever what this means.

tigergambit

Grumpelstiltskin said:

OK So we really need to know details of your debts. How much? Who with? How old are the debts? Have you ever requested CCAs?
That will do for a start.

Tesco £9900, defaulted, CCA produced
PR A £4950, defaulted, CCA produced
Sainsbury's £3290, defaulted, CCA produced

fatbelly said:

I think you are correct to prioritise secured debt.t

It worries me a little that you are talking about retiring in 2029 but the mortgage does not complete till 2031. 

I think you will have to review that decision. You cannot be forced to retire at state retirement age, which I assume for you is 67.

I'm a low ranking Civil Servant but the good news is that I work as a data processor moving around data that nobody else appears to be able to do. Not sure why. I was a bit worried about the coming cuts but have been told that I'm too useful to them and would be very unlikely indeed to be made redundant. It's an easy job that I like so could stay after 67 if necessary, full or part time. Really good pension contributions too.

TheAble said:

Agree focussing on the mortgage is the right approach. The bank might agree to extend beyond 2031 but there's no guarantee on that, so you want to make sure it's paid by then.

Retiring in 2029 might be ok as long as your pensions will cover the mortgage repayments and any other essential outgoings.

Thanks. I currently pay just under £1,000 per month including a small overpayment. Problem is that by the time my fix ends I won't owe sufficient to get another fixed deal so will be on SVR (I only found that out recently). Even so, I think we should be able to clear it. Our income in retirement will be even less than it is now which is a lot less than it used to be, hence we are asset rich living in a nice home.

I'm assuming that the creditors will get paid from our estate after we die which hopefully will be a long way in the future.

RAS

Any thought about taking a lodger or two? Not suggesting all year round but.....

Any sports or other major events close enough to you to offer event accommodation? 
Newbies, possibly even through work, looking for short term digs?
Contract staff looking for short-term weekday digs?

Keep it under £7k and there's no tax to pay.

kimwp

I think once a mortgage is small (under £40k), then it's unlikely that you can shop around and get a deal with other providers, but you should be able to fix with your current provider.

fatbelly

Thinking about what you've been saying, a decent redundancy package, some time in the next few years, could be just what you need....

tigergambit

RAS said:

Any thought about taking a lodger or two? Not suggesting all year round but.....

Any sports or other major events close enough to you to offer event accommodation? 
Newbies, possibly even through work, looking for short term digs?
Contract staff looking for short-term weekday digs?

Keep it under £7k and there's no tax to pay.

We did this for a while and it worked very well but after the last tenant left we found it difficult to get someone else. We are fortunate enough to be close to a major wedding venue here in the Cotswolds so we do AirBnB which gives us a similar income, mainly from summer weekends. Obviously there's a cost involved but we just go camping or stay with our children if it's colder. Surprising how this adds up tbh - it certainly pays for our weekends away and more. Again this is something we can continue into retirement too.

I do agree that lodgers are a good tax free income source. We don't get greedy with the AirBnB - we made over £6k last year which gave us some mini breaks and about £3k off the mortgage. I shut it down once we have reached target as it wouldn't be worthwhile once tax became due.