Other people's facepalm financial management
Discussion
sidicks said:
walm said:
Don't you need to remortgage for that?
Something that (for now) is relatively difficult for retired people, isn't it?
No, that's precisely what equity release is designed for!Something that (for now) is relatively difficult for retired people, isn't it?
I was thinking about MEW (mortgage equity withdrawal).
Equity release seems to be an option for a relative of mine who is 69, mortgage free but doesn't have the ready funds to pay for holidays or house maintenance like new windows and electrics.
Normal mortgages aren't much use because the repayments are too high for them and interest-only is only available if you have a repayment vehicle.
The trouble is that equity release interest rates are around double (ie. 6%) compared to normal mortgage interest rates.
Normal mortgages aren't much use because the repayments are too high for them and interest-only is only available if you have a repayment vehicle.
The trouble is that equity release interest rates are around double (ie. 6%) compared to normal mortgage interest rates.
Have seen both sides of the coin, so to speak
Five years ago I was on the verge of having to declare myself bankrupt due to having to service debts built up within a marriage. She buggered off and left me with the lot (as she very cleverly made sure all of the debt was in my name)
I worked both full and part time for the next 3 years merely meeting minimum (and sometimes reduced) payments. House in negative equity as well. Whilst many told me simply to go bankrupt and walk away I felt that morally, having had the money and being a part of spending it, it was a legalized form of theft. Others I know were not so scrupulous and have written off their debt before building up a load more
Eventually I met someone new (with her own issues left by her ex husband) and we have slowly but surely worked on it together but are both considerably more financially astute and careful. I was promoted to a completely new level of earnings last year and use my commission/quarterly bonuses to smash debts as quickly as possible. Her mum passed away last year and left her a bit so we both got newer cars (about £3k each) and the rest has been put away
We are looking to buy a house in the next 6 months (after a low budget wedding) and then I intend to be debt free in the next 2 years apart from the mortgage, and never to go back there again. I am also paying a little extra into my pension and intend to up this accordingly as other outgoings decrease
It's not always an individuals sole fault is the point that I try to make
Five years ago I was on the verge of having to declare myself bankrupt due to having to service debts built up within a marriage. She buggered off and left me with the lot (as she very cleverly made sure all of the debt was in my name)
I worked both full and part time for the next 3 years merely meeting minimum (and sometimes reduced) payments. House in negative equity as well. Whilst many told me simply to go bankrupt and walk away I felt that morally, having had the money and being a part of spending it, it was a legalized form of theft. Others I know were not so scrupulous and have written off their debt before building up a load more
Eventually I met someone new (with her own issues left by her ex husband) and we have slowly but surely worked on it together but are both considerably more financially astute and careful. I was promoted to a completely new level of earnings last year and use my commission/quarterly bonuses to smash debts as quickly as possible. Her mum passed away last year and left her a bit so we both got newer cars (about £3k each) and the rest has been put away
We are looking to buy a house in the next 6 months (after a low budget wedding) and then I intend to be debt free in the next 2 years apart from the mortgage, and never to go back there again. I am also paying a little extra into my pension and intend to up this accordingly as other outgoings decrease
It's not always an individuals sole fault is the point that I try to make
Audemars said:
I expect the next generation average figure to be worse and that includes inflation. This generation have spent all their money on cars and holidays.
This. Being part of the younger generation and only about to start my career I'm constantly in shock at the attitude people my age take to money. It was summed up for me this morning in the latest in a long line of BBC News articles about how no-one under 40 can buy a house: http://www.bbc.co.uk/news/business-36391621one of a couple 'forced' to move back in with parents said:
She cannot foresee being able to get a place of their own in the near future.
"I'm pessimistic. On our current salaries, no way. If we did, we wouldn't be able to eat out or go on holiday."
"I'm pessimistic. On our current salaries, no way. If we did, we wouldn't be able to eat out or go on holiday."
Jockman said:
Ozzie Osmond said:
Yes, the concept is good but it's difficult to understand the ruthless exploitation of the vulnerable with these punitive rates.
Think I saw one go to 5.05%.I would still not want my parents involved in them.
If he settled the loan he didn't have enough the buy the house he wanted. If he carried it forward it would have soaked up almost the entire value of the new house.
Twin1 said:
Audemars said:
I expect the next generation average figure to be worse and that includes inflation. This generation have spent all their money on cars and holidays.
This. Being part of the younger generation and only about to start my career I'm constantly in shock at the attitude people my age take to money. It was summed up for me this morning in the latest in a long line of BBC News articles about how no-one under 40 can buy a house: http://www.bbc.co.uk/news/business-36391621one of a couple 'forced' to move back in with parents said:
She cannot foresee being able to get a place of their own in the near future.
"I'm pessimistic. On our current salaries, no way. If we did, we wouldn't be able to eat out or go on holiday."
"I'm pessimistic. On our current salaries, no way. If we did, we wouldn't be able to eat out or go on holiday."
That's nothing. Imagine how hard it is for these poppets.. struggling to get by on £200,000 pa.
http://www.ft.com/cms/s/2/d6f1e58e-20c9-11e6-aa98-...
(Paywall might apply)
http://www.ft.com/cms/s/2/d6f1e58e-20c9-11e6-aa98-...
(Paywall might apply)
Ozzie Osmond said:
LeoSayer said:
The trouble is that equity release interest rates are around double (ie. 6%) compared to normal mortgage interest rates.
Yes, the concept is good but it's difficult to understand the ruthless exploitation of the vulnerable with these punitive rates.
t scared of a bad headline that they'll run a mile from any potential customer that shows a hint of being vulnerable in any way. There was some proper wild west stuff going on in the ER market 15 years ago, from which a lot of the horror stories originate, but nowadays it's one of the most tightly regulated retail financial products you can buy. I also know that most of the complaints regarding ER come not from the people who took it out but from offspring who are upset that their prize for choosing their parents wisely won't be as large as they thought! Ginge R said:
That's nothing. Imagine how hard it is for these poppets.. struggling to get by on £200,000 pa.
http://www.ft.com/cms/s/2/d6f1e58e-20c9-11e6-aa98-...
(Paywall might apply)
Comical, really. Although what I am about to say is possibly ridiculous on such a forum as this, basically they're suckers for materialism.http://www.ft.com/cms/s/2/d6f1e58e-20c9-11e6-aa98-...
(Paywall might apply)
Hoofy said:
Comical, really. Although what I am about to say is possibly ridiculous on such a forum as this, basically they're suckers for materialism.
Many such people are probably going to have the double whammy of losing their jobs before they get anywhere near retirement age and they're going to be in dire straights as they get older.Sheepshanks said:
Hoofy said:
Comical, really. Although what I am about to say is possibly ridiculous on such a forum as this, basically they're suckers for materialism.
Many such people are probably going to have the double whammy of losing their jobs before they get anywhere near retirement age and they're going to be in dire straights as they get older.Baffling - but unsurprising. I read research a few months ago about the average time someone could carry on meeting their expenses if they lost their job, based on current savings. It was well under 3 months.
Conversation in office today re fuel price creeping up:
Sensible bloke: It's crept back up to £1.12.
Idiot woman: That's still cheap, it was over £3 when I started driving.
SB: Errr, that was per gallon, this is per litre.
IW: So what. What difference does that make? The price is the price.
SB: Are you serious? A litre is only about a quarter of a gallon.
IW: None of it is relevant to me anyway, as I just put in £25/week regardless.
Sensible bloke: It's crept back up to £1.12.
Idiot woman: That's still cheap, it was over £3 when I started driving.
SB: Errr, that was per gallon, this is per litre.
IW: So what. What difference does that make? The price is the price.
SB: Are you serious? A litre is only about a quarter of a gallon.
IW: None of it is relevant to me anyway, as I just put in £25/week regardless.
TwigtheWonderkid said:
Conversation in office today re fuel price creeping up:
Sensible bloke: It's crept back up to £1.12.
Idiot woman: That's still cheap, it was over £3 when I started driving.
SB: Errr, that was per gallon, this is per litre.
IW: So what. What difference does that make? The price is the price.
SB: Are you serious? A litre is only about a quarter of a gallon.
IW: None of it is relevant to me anyway, as I just put in £25/week regardless.
That's why people end up with brand turd vehicles on finance.Sensible bloke: It's crept back up to £1.12.
Idiot woman: That's still cheap, it was over £3 when I started driving.
SB: Errr, that was per gallon, this is per litre.
IW: So what. What difference does that make? The price is the price.
SB: Are you serious? A litre is only about a quarter of a gallon.
IW: None of it is relevant to me anyway, as I just put in £25/week regardless.
I only put it £25 every two weeks now.
brickwall said:
Quite. How anyone in that position would not have squirreled away a good chunk of rainy-day money is baffling.
Many seemingly intelligent people use one of the following:'But I might get run over by a bus tomorrow, haha'
'I don't live to work, I work to live!'*
'You've got to enjoy it while you have it'
- these people are still working
Northbloke said:
uknick said:
An example of this is when Osborne allowed people to cash in their pension fund so as to generate growth in the economy, albeit temporary.
Agreed. What was he even thinking with that one?There's a real problem with people not saving anywhere near enough for their retirements (so future govts will have to pick up the tab). I know, let them blow some of what little they do have on a car and a holiday.
Bonkers.
As a natural saver it really bugs me that all incentives are biased towards the feckless (e.g. bailouts, no repossessions for political reasons). Is it the absence of moral hazard (or is it the presence of it, not sure which way around!)
Making pensions more flexible has been a real shot in the arm to pensions, makes them much more attractive as a way to save for retirement so should encourage more saving, not less.
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