FLEXIBLE MORTGAGE OPTIONS FOR LATER LIFE

Later life mortgage options are increasing. The increasing flexibility of Lifetime Mortgages are making these more and more popular. Here are some examples of cases we have dealt with recently:

- An older couple with an interest-only mortgage reaching its end and with a historical bankruptcy and CCJs were able to clear all they owed and also finance an extension to their property.

- Another couple had moved into what they were sure would be their last move and wanted to enjoy their life with a great deal of travelling while they could. They had already markedly assisted their grown-up children with their own properties and good incomes. There were some medical issues so they wanted to spend money now rather than later. They also wanted to maximise what they could get at the present fixed rates so as to avoid any possible interest rate increase in the future.

- Another couple in a Grade II listed building were reaching the end of their interest-only residential mortgage and did not want to have to move to a repayment mortgage. They wanted to stay where they were and continue with a similar interest-only type of arrangement but without a fixed term which could cause worries in the future.

- A widowed mother of two was still working but needed to extend the house so as to provide accommodation for an imminent grandchild. She wanted to pay interest monthly so the amount owed would not increase.

- Another family living in a large house wanted to keep the house for themselves and their daughters but were not able to access normal mortgage facilities due to the pensions they would receive being insufficient to fund the needed borrowing.

SUMMERTIME TIPS

While there are a lot of changes on the horizon politically we believe that that best way to deal with personal finances is keep to the basics of providing a valuable service or product and ensuring that you have more money coming in than going out.

Lasting Power of Attorneys (LPAs) and Wills – reminder. It may be that the older one gets the more aware one is of older people and the challenges that come in later life. Certainly we do see more situations where Wills and LPAs (Lasting Power of Attorney) are important. We do recommend that you seriously consider setting these up or reviewing them if you already have them.

DOING OUR BEST TO BE EFFICIENT AND SPEEDY!

We work hard to provide the best possible service we can for our clients to help them achieve their objectives and enjoy financial security (although sometimes achieving both these goals can present a challenge!). Here are what a few clients have written recently:

“A big thank-you from both of us. We have used you before and are confident in your advice.” - Mr & Mrs MB of Uckfield

“Totally met our expectations – over and beyond. Very fast and efficient and reliable service.” - Mr & Mrs LC of East Grinstead

SOME SAVINGS AND INVESTMENT OPTIONS

With interest rates at low levels it is a struggle to get much of a return on your cash savings. It is very sensible to keep a reasonable amount of money in cash for emergencies and for anything you will need to pay for in the near future. However, in the longer term you may wish to take a risk with some of your savings by investing them in stocks and shares. One easy way to do this is to use a Stocks and Shares ISA into which you pay monthly. By saving on a monthly basis the risk is less as sometimes you are buying when the market is high and sometimes you are buying when the market is low.


For those with a lump sum they are willing to invest for 5 years or longer, it may be worth looking at an Investment Bond. The money you put in is invested in a range of stocks and shares. You can decide at the start what level of risk you are willing to take, and you can change that whenever you wish. The Investment Bond has a useful feature. Each year you can withdraw up to 5% of the amount originally invested without paying tax. This would give you an annual amount of 5% net each year. This compares well with the 1% to 2% you might get from cash savings options, although you do need to take into account that the value of your investment overall will be going up and down in line with the Stockmarket. We would be happy to discuss this option with you in more detail. Just give us a ring.

CREDIT CARDS – A BLESSING OR A CURSE!

Earlier generations could not spend money they had not already earned, because they had no choice! The invention of credit cards has changed this. They provide a useful tool but also one that can easily lead to disaster. As with any tool they work well when they are used properly. Using a credit card for on-line purchases, for an alternative to cash when you are travelling abroad, etc. are all very valid. But one has to hold the line and make sure that one pays off the amount owing in full each month when it is due. It can become very difficult to clear credit card debts once they are allowed to build up and the interest is increasing.

STAYING UP TO DATE

Recently when completing our Lasting Power of Attorney, my wife and I had occasion to review our Wills. Written 25 years ago, needless to say that they needed updating for various reasons including the fact that one of the executors we had appointed to look after our children had recently passed away. The moral of the story is to do a regular review of these important matters.

MAXIMUM PENSION ALLOWANCE

While the rules are more complex for high earners, for most people with a personal pension plan, the maximum they can contribute to their pension is £40,000 per year or the amount of their annual taxable earnings, if less. Contact us if you want to find out what your maximum contribution would be.

There is also a maximum Pension Lifetime Allowance. The Government has put a limit on how much you can build up in your pension over your lifetime. This currently amounts to £1,055,000 and is intended to increase each year in line with the rate of inflation. For those with pensions related to their salary and years of service, there is a formula which gives an equivalent value that can be built up.