Yeah I understand. For some people it's quite personal/emotive. For others it's absolutely clinical.
I guess it's important to be informed and understand. As some people just don't understand the maths involved.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Yeah I understand. For some people it's quite personal/emotive. For others it's absolutely clinical.
I guess it's important to be informed and understand. As some people just don't understand the maths involved.
Stop being so balanced.
Agree - don't need the psychological benefit of no mortgage but can see the appeal..much prefer to have a sack of cash should something catastrophic happen
Yeah, we've sacrificed savings to pay off mortgage.
Pay off mortgage.
Pension sorted - and praying Gov don't introduce means tested State Pension.
Kids will have 1 year left of Uni when i finish my contract.
Kids have their CTF - £10k each locked away in LISAs.
IF i am able to get another job, the goal will be build up a cash reserve 52 - 60yrs old which is when i plan to retire
Yeah, we've sacrificed savings to pay off mortgage.
Pay off mortgage.
Pension sorted - and praying Gov don't introduce means tested State Pension.
Kids will have 1 year left of Uni when i finish my contract.
Kids have their CTF - £10k each locked away in LISAs.
IF i am able to get another job, the goal will be build up a cash reserve 52 - 60yrs old which is when i plan to retire
Means stated state pension..
I'm not sure as it would be political suicide.
I suspect they will just increase it until most people never see it.
Man of Honour
The pensioners fuel allowance changes are basically this already, are they not? Sure it's not technically means testing pension, but it's a monetary benefit to people of state pension age and they're means testing it. If it's ok to remove this financial support based on your means then why is not ok to remove more?
Because one is an additional benefit started recently and only ever temporary and the other is basically a state mandated savings account people pay into their entire working lives?
How is this so hard for people to understand?
Man of Honour
Except of course that isn't how it works, there is no account, today's taxes simply service today's welfare state with zero benefit from investment growth.
Ref: the fuel payment being temporary benefit, sure, technically, but no matter how temporary something is intended to be, once it's been going the best part of 30 years it's probably fair to describe it as a semi-permanent fixture/expect to receive it as much as any other benefit your taxes have paid for over the decades. It's interesting you bring up "working lives", I'd argue a good definition of this would be 35 years, based on the 35 years of NI you need to contribute to be eligible to receive the full state pension. With the current winter fuel payment "temporary" scheme having run for 27 years now, is it fair to say that those who have been tax payers since 1997 have paid just as much in to this as they have their state pension, and it's therefore reasonable to expect that they should receive this? Cutting what is undeniably now a long running benefit (when compared with a "working life" as defined by NI contribution years) isn't trivial and it sets a precedent for further acceptance of means testing on similar benefits.
Soldato
You are of course correct and its the main crux of the whole "paying NI is not you paying into a pension pot". To this I disagree. If the Government, via its HMRC dept, put in a system whereby they state that the level of pension you receive depends on the number of qualifying years of NI you have paid over your working life than they have implicitly linked NI with pensions. If, after paying the full 35 years of qualifying contributions, the Government then turn around and means test the pension, there would be protests the like the UK has probably never seen.
Its just not going to happen in the next 20-30 years IMHO.
Man of Honour
Yeah true, they have explicitly highlighted the eligibility criteria vs other benefits, but it is still a slippery slope. They are already moving the goalposts with the state pension age, there's an argument to be made that this is actually far worse than means testing.
I really hope you're right (30 years would put me still just out of reach of the current age...), but I also understand they have to do something or we're completely screwed as a nation. I want the state pension, but I also want a functioning nation and a future for my children.
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Soldato
If the winter fuel payment was universal it may as well have been rolled into state pension as a single benefit.
It's a symptom of our skewed politics that parties can play off pensioners against the rest of us. It's right that it's gone and replaced with a means tested benefit. Now those who don't need it aren't getting it, and those that do really need it get the pension credit.
I agree it won't happen.
But eligibility is different to funding. State pension is funded from current tax receipts. Eligibility doesn't change that one bit. All of our current taxes pay for current pensions. If people believe there is a link then they are incorrect.
It's a symptom of our skewed politics that parties can play off pensioners against the rest of us. It's right that it's gone and replaced with a means tested benefit. Now those who don't need it aren't getting it, and those that do really need it get the pension credit.
I agree it won't happen.
But eligibility is different to funding. State pension is funded from current tax receipts. Eligibility doesn't change that one bit. All of our current taxes pay for current pensions. If people believe there is a link then they are incorrect.
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Soldato
I dont follow... Can you elaborate what you mean?
Soldato
The WFA was pretty much unchanged since its introduction and was a sticking plaster to the terrible state pension of the time. With the significantly increased pension in real terms compared to when the WFA was introduced there had to come a time when it was scrapped.
I think until you have gone mortgage free its hard to understand the psychological impact of that.
Whilst technically you can be better off with savings its something that needs to be qualified specifically since where and how much are also important.
Higher rate tax payers can in effect earn very little without anything but a very bargain rate mortgage being better now.
Historically there was little time when interest achievable would beat mortgages these have been fairly exceptional recent times.
Whilst technically you can use savings to pay off the mortgage if something happens I suspect thats a very difficult thing to do mentally.
Plus of course good luck applying for a new mortgage deal when your going to fail the affordability tests.
No matter what however a buffer contingency should come before overpayments for everyone where possible. 3-12 months of expenses stashed away based on your reasonable expectations to get another job that will meet your outgoings within a reasonable timeframe.
Depending on mortgage provider you may be able to take a payment holiday anyway.
Nationwide for example record overpayment separately (the gross not any impact from interest savings) which you can ask to use for a payment holiday.
You used to be able to with many lenders, but its rare now, request cash back from any overpayments you had made.
I think until you have gone mortgage free its hard to understand the psychological impact of that.
Whilst technically you can be better off with savings its something that needs to be qualified specifically since where and how much are also important.
Higher rate tax payers can in effect earn very little without anything but a very bargain rate mortgage being better now.
Historically there was little time when interest achievable would beat mortgages these have been fairly exceptional recent times.
Whilst technically you can use savings to pay off the mortgage if something happens I suspect thats a very difficult thing to do mentally.
Plus of course good luck applying for a new mortgage deal when your going to fail the affordability tests.
No matter what however a buffer contingency should come before overpayments for everyone where possible. 3-12 months of expenses stashed away based on your reasonable expectations to get another job that will meet your outgoings within a reasonable timeframe.
Depending on mortgage provider you may be able to take a payment holiday anyway.
Nationwide for example record overpayment separately (the gross not any impact from interest savings) which you can ask to use for a payment holiday.
You used to be able to with many lenders, but its rare now, request cash back from any overpayments you had made.
Soldato
I was just refering to this sentence:
Whilst the level of pension received does indeed depend on you putting in all the qualifying NI years, this doesn't change how they are funded. It's simply an eligibility criteria that applies later. NI and tax don't fund future pensions, they fund today's pensions, and everyone contributes proportionally depending on income.
I was simply saying that if someone makes this link in their mind, it is incorrect one.
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Soldato
Ah ok. I thought you were disagreeing with the argument that, despite what some people say, NI is linked to pension.
Some people are of the opinion that, because NI pays for current pensions, paying it does not influence your own pension. It's used to support the "you are not guaranteed a state pension just because you have paid NI, they are not related"
You can get a full state pension having paid zero NI tax your entire life.
As long as you earn above the minimum threshold each week/month which is covered by the zero rate allowance, you get your NI tick.
If you have kids, child benefit gives you the NI tick for 18+ years.
Other income related benefits like universal credit also give you the NI tick as does contribution based JSA and ESA for the time you have a live claim.
As long as you earn above the minimum threshold each week/month which is covered by the zero rate allowance, you get your NI tick.
If you have kids, child benefit gives you the NI tick for 18+ years.
Other income related benefits like universal credit also give you the NI tick as does contribution based JSA and ESA for the time you have a live claim.
Literally the definition of boomers pulling up the ladder
Just to correct that bit, you get a NI tick from CB for children under 12, though as you said kid(s) that can obviously cover more than 12 in total.
It changed in 2010, where it was 16 previously, and you didn't get a tick, but HRP (a reduction in qualifying years required).
The qualifying years changed in 2010 from 44 for men and 39 for women to 30 for both and then again in 2016 to the current 35. So the eligibility criteria can and does change over time.
Happy new year all. A joyful thread to bump in January!
I am within 6 months now and with HSBC. Never remortgaged before so was trying to start the process today to lock something in early just on the off chance rates sky rocket between now and June, despite that I'm sure they will come down a little bit.
1: How do I find out the value of my property? Do I just go with the average between the free zoopla and right move?
2: What happens if I apply for a rate which is within an LTV band which ends up to not be the case due to what HSBC value my property as? I assume I will just be refused that rate and given the next one up?
3: If I apply for something with an arrangement fee like the ones that are say £999, can I still make it come off the balance when it starts, meaning I won't have to pay a penny to "lock in" now, or will they need to take something up front to lock me in? If the later, can I get that money back if and when I find a better deal nearer the time?
4: If I lock in early as an existing HSBC customer, are there any disadvantages to doing that where HSBC won't allow me to switch to one of their own better deals nearer the time?
5: Is it worth just waiting until February anyway when BOE are likely to cut rates slightly anyway?
I am within 6 months now and with HSBC. Never remortgaged before so was trying to start the process today to lock something in early just on the off chance rates sky rocket between now and June, despite that I'm sure they will come down a little bit.
1: How do I find out the value of my property? Do I just go with the average between the free zoopla and right move?
2: What happens if I apply for a rate which is within an LTV band which ends up to not be the case due to what HSBC value my property as? I assume I will just be refused that rate and given the next one up?
3: If I apply for something with an arrangement fee like the ones that are say £999, can I still make it come off the balance when it starts, meaning I won't have to pay a penny to "lock in" now, or will they need to take something up front to lock me in? If the later, can I get that money back if and when I find a better deal nearer the time?
4: If I lock in early as an existing HSBC customer, are there any disadvantages to doing that where HSBC won't allow me to switch to one of their own better deals nearer the time?
5: Is it worth just waiting until February anyway when BOE are likely to cut rates slightly anyway?