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.
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