Is A Lifetime Mortgage An Use If You Have A Pension Shortfall In Retirement

Throughout the british isles the State Pension Scheme is made up of both a basic pension along with an earnings related portion which is supported by National Insurance Contributions (NICs). Each of us recieves the basic state pension, which is paid at retirement age, with the earnings related pension - Serps, only being paid where the retiree has qualified and not “contracted-out”.

The basic State Pension commences payment by the government when you reach 'State Pension' age. It is based on the amount of qualifying years you have paid National Insurance contributions (NICs) for.

You will get the basic State Pension simply by accumulating sufficient 'qualifying years' before State Pension age. Qualifying years are seen as tax years where you have had adequate income to pay National Insurance contributions, or where you are treated as having been paid paid or being credited with National Insurance contributions.

At the time of writing, you will get full-benefits in the event you retire at age sixty (with regard to women) or 65 (with regard to men), providing you have a full contribution record.

Right from spring 2010 and beyond, the number of National Insurance years folks must have to be able to qualify for the complete basic state pension will be cut from 44 with regard to men and 39 regarding women to only thirty with regard to both sexes.

If you might be uncertain whether you can receive the full pension, and are arranging for your retirement at this point, it is possible to ask for a retirement benefits forecast from the Department for Work and Pensions (DWP). This would determine if you've a shortfall in contributions so that you can reach a conclusion regarding whether it is worth having to pay in backdated National insurance contributions for either yourself or even your spouse.

Just what assistance can be obtained if your pension is not likely to be sufficient though?

Receiving the basic state pension is excellent, however with today’s cost of living the basic pension can be quite a long way from being sufficient to meet even the most basic costs of living. In case you are one of the people troubled by deficiency of pension income and you own a home, then an equity release lifetime mortgage could be the solution.

Lifetime mortgages are products that are made available to individuals who own virtually all their own home, and are probably retired or perhaps approaching pension age. Lifetime mortgages enable the owner of a property to borrow against the worth of their home, and pay back the borrowed funds at a fixed interest rate as well as compounded interest, which includes a negative equity guarantee built in, with the debt becoming paid back when the individual dies, or moves out of a home in to sheltered accommodation or perhaps long-term care.

Equity release Lifetime mortgages are typically the most popular equity release product, allowing over-55s to borrow money against their own home without the need to worry about payments.

Lifetime mortgages are a major decision and not always the suitable course of action for everybody. Different considerations including the utilization of current savings as well as investments or downsizing to a smaller sized house could be more desirable, and because Lifetime Mortgages can affect eligibility to UK means tested benefits such as Council Tax Benefit, Pensions Credit and/or Pensions Savings Credit, it is always advised that you look for advice from an independent adviser who specialises in Lifetime Mortgages.

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