Our Financial Lifeline FAQs  

Bite-sized Financial Lifeline FAQs

Designed to help you to understand some of the options, below are listed the main pros and the cons you’ll need to consider when it comes to COVID-19.

Putting aside the human tragedy, the national emergency brings with it real financial challenges. Whether you’re self employed or working for a blue -chip company, it’s likely that you will feel the impact of the economic consequences of the Coronavirus.  Equally, it’s never been more important to keep level-headed and think clearly before making any major financial decisions.

Some financial decisions are irreversible, so it’s essential that you speak to an independent financial adviser, before you take any action. If you need assistance, just get in touch and we’d be pleased to help.

Retirement Planning FAQs

Recent events may have made you think more about what the options are around retirement. Perhaps to access your pension earlier, either partially or in full. Or perhaps to put as much away as possible, should you plan to retire in a few years’ time. Our FAQ may help by answering the most common questions you’re likely to be asking right now.

  1. When can I retire?

    It’s important to decide when to draw your pension and you may choose to retire earlier or later than initially planned.

    Since the introduction of Pensions Freedom in April 2018, it’s been legally possible for you to draw your pension from age 55. In order to do this, you may need to move your pension pot to a different type of pension ‘wrapper’. Some workplace pension schemes don’t allow you to draw benefits early – we’d suggest you check with your scheme trustees whether this might be possible.

  2. If I’m in poor health, can I access my pension early?

    If you’re in poor health, you may also be able to access your pension earlier than age 55 or your scheme retirement age. Your pension provider will normally write to your GP and ask for some medical evidence to support your request.

  3. Can I draw my pension as and when I want it?

    Some pensions will allow you to draw your pension at different levels and frequencies. You may also be able to stop and start. These pensions do this through a facility called ‘pension drawdown’. Most modern person pensions offer this facility. Some older personal pensions may not and you may need to consider transferring your pension pot to enable you to use pension drawdown. Some pensions are designed only for pension drawdown, although most modern pensions will allow a combination of regular/lump sum payments into your pension fund, as well as income and /or lump sums out.

  4. Do I need to retire or stop work to draw my pension?

    No. You don’t need to leave employment or stop work to start drawing your pension. You may consider drawing your pension gradually, possibly by reducing the numbers of days you work a week.

  5. How much State pension will I receive?

    The amount of State pension you will receive will depend on your National Insurance contributions and/or your pension credit history.

    Men born after 5th April 1951 and women born after 5th April 1953 will be entitled to the ‘flat’ State pension, introduced in April 2016 provided they have accumulated at least 10 qualifying years of National Insurance contributions or credits. You’ll be eligible for the maximum State pension after 35 years under the new scheme. If there are gaps in your contributions history, you can pay additional (Class 3 ) National Insurance contributions. The new State Pension for the 2020/2021 is 175.20 per week.

    You can obtain an estimate of your State pension entitlement by completing an BR19 form on the Government’s website. However, to estimate your weekly State pension, multiply the number of complete qualifying years or National Insurance contributions or credits by five.

  6. Is now the right time to draw money from my pension pot ?

    Before taking money out of your pension pot, you need to consider whether what’s left will be enough for you to retire on. You need to also consider that your spending may increase during your retirement, inflation will reduce the buying power of your pension pot over time and you may live longer than you expect!

All these factors need careful analysis and our planning techniques take all these factors into consideration.

Read more about the Retirement Options.

Mortgage Planning FAQ

Having a mortgage right now may be playing on your mind. There are several things you can do to manage your mortgage debt if your finances come under strain, or simply want to reduce the overall cost of your mortgage. Our FAQ may help by answering the most common questions you’re likely to be asking right now.

  1. What happens if I can’t pay my mortgage?

    If you think you won’t be able to make a mortgage payment partially or in full, it’s best to act immediately. Lenders are required to take all reasonable steps to help their borrowers manage their debt, before resorting to more formal steps, but it’s important to make your lender aware of any challenges you face as soon as possible. The Council of Mortgage Lenders (CML) also has a code for its members, which provide around 95% of all lending in the UK. The CML’s code includes rules and procedures to protect borrowers.

  2. What can I do to reduce my mortgage outgoings?

    You should speak to your lender about the options they can offer to help you reduce your mortgage payments. These may include temporarily giving you a ‘payment holiday’, although it will normally be subject to how well you’ve maintained your mortgage payments.

    It’s important to remember that payment holidays are not free; any payments missed will be added to your existing mortgage and as such you will be charged interest on these missed payments. You may also find that the rate of interest changed on any missed payments may be higher than on the remainder of your mortgage.

  3. What options other than a payment holiday do I have?

    If you have a repayment mortgage, an alternative to taking a payment holiday might be to extend the term of your mortgage. Again, the lengthening of your mortgage term will mean that you’ll pay more interest over the whole term. You could consider converting to interest-only where you purely pay interest; but you’ll need to ensure you have a suitable repayment strategy in place to repay any remaining capital at the end of your mortgage term.

  4. Can I use my savings to reduce my mortgage payments?

    If you have a significant amount of money in savings, consider an offset mortgage, which will mean that you won’t receive interest on your savings, but your interest on your mortgage will be worked out on the net balance. For interest-only mortgages this may mean that your monthly repayment is reduced. If you have a repayment mortgage, you could shorten the term or possibly reduce your monthly repayments.

Your existing lender may be able to offer you all or some of these options, again subject to a satisfactory payment history. If not, you may need to move your mortgage. If you need advice or help, simply get in touch.

Read more about our Mortgage Services