Mums Finance

Millions of people approaching retirement are being hit by a crippling combination of large mortgages and no savings.  Those aged between 55 and 64, known as ‘pre-retirees’, have been unrealistic about their pensions and are living in a state of denial about their finances. Many people never look at their pension statements, simply filing them away every year, hoping they will have enough to pay for a good retirement – which most of them will not. Pension experts warn against the widely held approach of using your house as your pension because few people actually want to move out when they get to retirement age.

And what about those people today who have never worked a day, having spent their most productive years on benefits – who will pay for their retirement and will there be any Govt pensions to go around at all in the future? my guess is they are in very big trouble.

Parents these days are remortgaging their homes to give money to their children to help them on to the property ladder. Others use their house as a ‘cash machine’, taking out money to put into a business, fund a better lifestyle or pay off debt and one can only blame those ‘cash equity’ tv commercials for the increase in such activity. I feel they are very bad decisions to make at such a time in your life. In the past, a typical pre-retiree would have had no mortgage, more savings and would have retired by the age of 65. Separate research yesterday highlighted the nightmare facing pensioners who have been saving all their lives – with little to show for it.

People approaching pension/retirement age need to seriously look at their finances and the lifestyle they will be able to afford; this might mean telling ‘the kids’ to find their own desposit for the house they want to buy – your retirement is at stake, let them work out their own problems.

Popularity: 13% [?]

Thousands of desperate savers are having their cash returned by Government-run National Savings every day following a record rush for one of its top deals. Savers whose incomes have been stripped bare by the fall in the base rate swamped National Savings with requests for a leading one year bond paying 3.95 per cent, and a two-year deal at 4.25 per cent. But after just 24 days the rates were pulled – the shortest time one of its savings products has ever been on sale.

Now thousands who hoped to have their meagre monthly incomes boosted by the deal, are having their cheques returned. At the last count more than 1,000 a day were being posted back. Many more applications are still to be received from savers who never realised the rates had been withdrawn. They will now be forced to seek out one of the lesser deals from elsewhere on the high street – the Post Office is doing a one year growth bond at 3.70% fixed for one year and a 4.25% rate for the two year deal.

This will be a further blow to those whose incomes have been devastated by the fall in the Bank of England base rate to a record low of 0.5 per cent. In some cases investors are getting just £8 interest a year for £10,000 of savings. If you do not need to depend on an income from your savings for the time being it would also do to look at investing in gold, shares or otherwise.

Popularity: 14% [?]

Now that the Tories are sensing a possible victory in the next election they might do best to announce the policies which will win over voters, not dissuade them. I for one want to see an end to eleven years of labour mismanagement; to an end of paying feckless people to stay at home and breed at the cost of the tax payer, to an end of germ-ridden hospitals with minimum ground staff and maximum administrators, to an end of Big City Bankers pocketing astronomical bonus payouts while we workers struggle with overdraft fees and charges.

One of the policies put forward will be cancelling the newborn baby-payouts to those at the higher end of the earning scale. I do not have too much of a problem with this however I do not want to see this payment being made solely to the children of chronically unemployed people who come under the heading of ‘the poorest of families’ and live a better life of benefits than retired folk on pensions do.  Not surprisingly many unambitious parents do not even bother to open a new account for their child to get the benefit of this £250 payment – just as well the money is locked away for the child.

Under the new scheme only disabled children will receive the payment as well as those from the poorest sector of society; I am hoping though that the Tories will acknowledge the fact that many married couples who work and support their own families often fall into that category…not just unmarried mothers.

Popularity: 18% [?]