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nettie

Joined: 02 Dec 2004
Posts: 5888
Location: Suffolk

Posted: Mon Apr 18, 05 9:20 pm Post subject:
My only worry about paying off early would be that if, god forbid, I became incapacitated and unable to earn income after the mortgage had been paid, then I would not have any money to survive on in my old age.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon Apr 18, 05 9:27 pm Post subject:
Why's that a problem with the Mortgage being paid early? You can pay the bulk of it off and keep it ticking over for the various benefits you get. Many of the insurances that you take out when you get a mortgage can be carried on AFAIK.

nettie

Joined: 02 Dec 2004
Posts: 5888
Location: Suffolk

Posted: Mon Apr 18, 05 9:31 pm Post subject:
Because Pilsbury implied he would have invested the money that he would have still been spending on the mortgage, to provide him with a pension.

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon Apr 18, 05 9:35 pm Post subject:
Ah, yes, same here. I think it's not one or the other but both if you can.

nettie

Joined: 02 Dec 2004
Posts: 5888
Location: Suffolk

Posted: Mon Apr 18, 05 9:41 pm Post subject:
Not really an option if you have a mortgage on your own

Pilsbury

Joined: 13 Dec 2004
Posts: 5645
Location: East london/Essex

Posted: Mon Apr 18, 05 9:43 pm Post subject:
Sorry must have missed the small print in my morgage, What benifits do you have if you have a morgage and become incapacitated and cant work? Do they pay your salary or something? sorry if these are stupid questions but I think I would be more worried if I HAD a morgage and couldnt work.

nettie

Joined: 02 Dec 2004
Posts: 5888
Location: Suffolk

Posted: Mon Apr 18, 05 9:47 pm Post subject:
I have various policies in place that would cover my mortgage payments if I became incapacitated and unable to pay. I can't think that the insurance would pay out into a savings plan or similar if I didn't have a mortgage.

Pilsbury

Joined: 13 Dec 2004
Posts: 5645
Location: East london/Essex

Posted: Mon Apr 18, 05 9:59 pm Post subject:

I have policys that pay out lump sums if i become permanantly unable to work, if I have no morgage, some state benifits ( after all i pay national insurance) and interest on the lump sums hopefully they will cover my needs.
On the other hand once the morgage is paid there is nothing stoping you getting another one, buy a second property in a company name ( I think this bypasses inheritance tax as the company owns the property not the person) and rent it out, cover the morgage and some insurance .

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Apr 19, 05 5:53 am Post subject:
I'm not that familiure with the insurances often packagd with mortgages such as decreasing term assurance. I don't know how they would work if you shorten he term of the mortgage and that would be worth looking into if people have them. On some flexable mortgages you can keep the term the same, pay off lump sums and just reduce the payments.

Richy Rich

Joined: 24 Mar 2005
Posts: 31
Location: Coventry - Warwickshire....

Posted: Tue Apr 19, 05 7:58 am Post subject:

Oh dear... you've started me off on another rant...

So here goes -

Pay into an insurance scheme that you 'HOPE' pays out should you have a problem and not be able to work...

Again - I am super dubious about these - no matter what it says in the blurb...

I have heard some serious horror stories.....

Here is a case where I spoke to a chap who was a teacher and involved in a serious RTA (Road Traffic Accident) - sustained terrible head injuries. Memory loss, mood fluctuations etc. He is now close to a clean bill of health (functioning human).

He claimed on his incapacity insurance and the company did indeed pay out - theres a first!

However ....

Insurance company are pulling tricks on him such as strangers walking up to him in the street and asking him how he feels! (This was countered by the chaps wife - before you question the chaps head injuries) - and has happened SEVERAL times...

My point being - most times insurance companies will FIGHT paying out and when they do - they get tricky about it,...

No thanks... throw all my money at getting rid of the mortgage (or get it down to a sensible level) - forget worrying about what MIGHT happen and make LIFE happen...

Richy....

Penny Outskirts

Joined: 18 Sep 2005
Posts: 23385
Location: Planet, not on the....

Posted: Mon May 22, 06 1:26 pm Post subject:

Thought I'd resurrect this thread, as it's something that's been crossing my mind recently. We're lucky that I will have my Abbey pensions at 58, which, if we own a property outright by then, will be enough to live on, in a farily comfortable Downsized way.

The biggest issue is health I suppose, which will determine how active a retirement you can have. On the bright side, growing your own food, and eating a healthy diet should help in that respect.

dpack

Joined: 02 Jul 2005
Posts: 46209
Location: yes

Posted: Mon May 22, 06 1:31 pm Post subject:
i might not live that long so now is what matters .

bernie-woman

Joined: 28 Oct 2004
Posts: 7824
Location: shropshire

Posted: Mon May 22, 06 1:34 pm Post subject:

It is certainly something which needs to be considered - I have a good a good teachers pension which is final salary but OH who has been paying in for a long time has fallen down a bit with equitable life

Our main concern is to achieve the right balance between paying some thought to pension and retirement but also making sure we live for the day ( a bit of a cliche - I know) but I have a brother and sister-in-law who in my opinion don't really have much fun in their lives because they are desperately working towards retiriing early - sadly my mother-in-law who had great plans of retiring back up to merseyside with her husband when she was 55 died of breast cancer at the age of 51 so we are very careful about making sure the balance is right - you just don't know what is round the corner

oddballdave

Joined: 08 Mar 2006
Posts: 259
Location: Telford, Shropshire

Posted: Mon May 22, 06 2:17 pm Post subject:

The maths just don't make sense to me.

An IFA did an assesment for White male aged 43 to retire at age 65 on benefit plus 50% (an assumed minmum income) This to pay out until aged 80.

He crunched some numbers and the amount I need to pay in each month is higher than my gross wage.

Average salary in this county is 50% higher than my actual salary.

So in simple terms I will never retire. So why bother with a pension?

bernie-woman

Joined: 28 Oct 2004
Posts: 7824
Location: shropshire

Posted: Mon May 22, 06 2:20 pm Post subject:

oddballdave wrote:

I used to tell students that they should be paying in from the age of about 17 if they want a decent pension - they used to fall about laughing

By the way - whereabouts in Telford are you oddballdave - you can't be too far away from me

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