Q&A for homeowners over 55
During this period of uncertainty, David Forsdyke, our Later Life Finance expert, answers some frequently asked questions from homeowners in their 50s and over.
I have a mortgage that I pay from my pension income. I can still afford the payments. Should I be asking for a payment holiday?
If your finances are stable and you have no need or reason to stop then I recommend you keep paying your mortgage every month.
However, if you’re starting to struggle, or have family who need some financial help over the short term, then taking a payment holiday could free up some of your income which can then be used for other things. Don’t take the decision lightly though, as the mortgage payments won’t simply disappear; your lender will want you to catch up in the future. Speak to your lender first, or visit their website, and find out how long you can stop your payments for.
I am retired and own my own home, but I don’t have a mortgage. I’m worried about my financial position. What can I do to shore up my finances during this period of uncertainty?
If you have enough income to pay bills, buy food and other essentials, and are not struggling, then try not to worry. There is no need to do anything immediately. If however your income no longer covers your outgoings and your savings are running low, please talk to us about the range of options available. Borrowing a small amount of the wealth tied up in your property, for example, can help you through a difficult period.
I am over 60 but still working. I am self-employed and my work has stopped. What can I do to replace my lost income?
First of all you should check whether you can claim under the Government self-employment income support scheme, which aims to provide up to £2500 per month from mid-May for at least 3 months. Details can be found on the Government website. If you need funds sooner, look at your savings and see how long they might last. You should also check and make sure you are claiming all the benefits you’re allowed to. You can check for yourself at www.entitledto.co.uk. If you have explored all options and still need some help you could look at taking out a Lifetime Mortgage secured on your home. This could be for a very small amount to start with, but can include a drawdown facility which would help top up your income until your work starts again.
I’m OK but I want to help my children/grandchildren who have lost their jobs or are struggling financially because of the lockdown. What can I do?
If you don’t have any other funds to spare (from savings or surplus income) you could look at the range of borrowing options now available for older customers who own their own property. For example, a Lifetime Mortgage would allow you to raise a small lump sum with which to help your family, or your could consider the growing range of Retirement Mortgages.
I’m drawing down from my pension, but my funds have been hit hard by the recent market declines and I’m worried I won’t have enough for the future. What are my options?
See if you can cut back on your expenditure and draw down much less over the short term, so more stays in your pension pot. As mentioned above, look at your other savings and check you’re claiming all the benefits you are entitled to. If you’ve exhausted these options, you could take out a small Lifetime Mortgage which might allow you to stop drawing from your pension and allow your funds to recover, giving you more security over the long term.
Please note, Knight Frank Finance do not give pension, investment or tax advice. We work closely with your trusted advisers to ensure you receive well rounded advice.
Our Later Life Finance team are here specifically to help homeowners over the age of 55. If you have any questions or concerns about your finances please get in touch with the team.