Pensions Uncertainty Could Lead Retirees to Mortgage Market
We remain concerned over reports of yet more tinkering with the pensions tax system leaving retirement income more uncertain than ever. With annuity rates at super-low levels and the Government reducing tax relief slowly over time it is a tough time for pensioners.
The annual tax-free allowance has already been cut to £40,000 and lifetime allowance on £1.25m but some want to go further. The Treasury has floated cuts to the tax-free lump sum from 25 per cent of the total to 20 per cent while Labour and the Liberal Democrats are plotting wholesale reforms after 2015.
The uncertainty over the pensions tax regime makes people turn to other investments to secure their retirement income and chief among them is always property. UK residential and buy-to-let property has in the past, proved a long-term stable investment providing a steady income for pensioners. We believe pensioners should be able to obtain mortgages in the same way as everyone else based on the test of their suitability and affordability and not be discriminated against, facing an arbritary ban simply because of their age.
Banks have always been cautious about anyone over the age of 65 having a mortgage but building societies have begun to pile on restrictions too.
In May, West Brom Building Society cut its maximum lending age from 80 to 70, meaning the day of your 71st mortgage you can not have a pensioner mortgage.
Newcastle Buidling Society and Skipton Building Society have also cut back on their offerings with many borrowers struggling to get deals beyond their 75th birthday.
A handful of lenders cut off at 65 including FirstDirect, Clydesdale and Yorkshire Banks, Teachers Building Society and Hinckley & Rugby.
Our brokers can guide you through the market to make sure you are not affected by these limits and can work around. For example, we work closely with lenders that have no age restrictions and numerous prominent lenders that lend up to 75. We are experts and right up to date on the latest criteria changes at mortgage lenders so we can scour deals on your behalf.
We can guide you through the process and help you own a home well into your 70s either as an investment or home to live in.
Look for advice
Our expert advisers at Capital Fortune know there is a huge amount of uncertainty for pensioner finances. There is state pension reform, threatened winter fuel allowance reduction as well as low annuity rates so make sure your mortgage doesn't add to them.
House prices are stable or growing strongly in certain regions offering a prospective investment in an uncertain climate. Keeping your foot on the ladder into your seventh and eight decades is something we specialise in helping you do.
Don't rule out a mortgage in old age but be aware that it is a minefield and regulated, professional advice can help you find your way, ensuring a mortgage deal is both suitable and affordable.
By finding you the right deal at the right rate our specialist advisers can fit a property into your investment portfolio or your current housing needs.
Everyone wants to own their own home whether you are 17 or 70 so don't rule it out and get in touch today because we can help.