RETIREMENT AND ME is the weekly series that looking at how people are spending their time and money as they approach and enter retirement. This week, a couple who are now mortgage free look back on their financial journey and reveal their “worst mistake”.
From the cost to the emotional attachment, buying property can often be a significant milestone in a person’s lifetime. In order to find out what property means to different groups of people, Just Group asked more than 4,000 adults from different corners of the UK what they think and feel about the topic. The research found that more than nine in 10 people over the age of 50 said that being financially comfortable in retirement is their most important long-term financial goal.
Among the respondents was Tania Jones, 58, who lives with her husband Peter, 71.
The couple paid off their mortgage this year, sold the house, and then bought a new home mortgage-free.
They’ve since used the money from their previous mortgage to pay off remaining debts, to ensure they leave something for their two children.
How does it feel now they’re mortgage free?
Speaking exclusively to Express.co.uk, Tania says: “Paying off a mortgage is wonderful!
“It’s a lot more freedom for us to get out and about.”
Tania is a 24/7 hour carer for her husband Peter, and adds: “It does sort of mean that we don’t have this constant worry.
“We’re not waking up at night thinking, ‘Can we make the mortgage payments?’
“The other thing was worrying we would lose the house because the market was so slow and buyers were sparse at the time. That was a huge worry for us.”
Peter turned state pension age six years ago, and currently claims the state pension, as well as receiving income from private pension pots.
Meanwhile, Tania claims the carer’s allowance, and is set to reach her state pension age of 68 in 10 years time.
Some years ago she discovered a “shortfall” in qualifying years for the full new state pension, however due to her Carer’s Allowance, she now gets National Insurance credits on her National Insurance record – which should provide Tania with more qualifying years.
Would Tania think about making private pension contributions?
“If things improved dramatically with my husband then I should imagine I would try and find some way to supplement into it,” she says. “Into the eventual pot.
“It does worry me, but at this stage there’s absolutely nothing I can do about it.”
The couple bought their first home in 1992, in St Albans, three years after returning from Australia with their four-week-old son.
Tania recalled: “We started off with one of these endowment mortgages.
“We found that was the worst mistake we’d ever made. It crippled us, absolutely crippled us.
“Being novice purchasers, we’d never owned property together, we’d just rented.
“We took advice from the bank that my husband was with at the time, and ended up going down a very crippling financial route with them.”
Peter went on to explain that after getting the mortgage, moving in, and refurbishing the kitchen and bathroom, they then had an “awful shock” three months later.
They received a letter, which said they were three months in arrears with insurance payments.
The couple said they were unaware that they had endowment insurance and had to find a lump sum of money.
Tania and Peter explained it was something they hadn’t budgeted for, with Peter adding: “It absolutely knocked me to my feet.”
The pair recalled “four years of a lot of hardship” in order to get themselves back on track financially.
They later sold the property in 1995, and purchased a new home in Milton Keynes.
Fast forward eight years, and in 2003, they relocated to Telford, Shropshire.
“We were able to use the profit from that property to come and purchase this house in Telford.”
In February this year, the couple moved again, downsizing to a home which is more manageable.
At the time, they had been approaching the end of their mortgage period, and despite encountering a struggle in selling on the housing market, they were able to pay off their mortgage and buy their current home outright.
Recalling their financial journey, Peter says: “I think I got into far more debt far more easily than I really should have done.
“If I did all that again, I would’ve done that all completely different.”
He adds: “I believe these days, well through my lifetime, credit and debt were just too easily available to me and if you’re not very financially savvy – and I’m not – it’s very easy to get in a mess very quickly.
“By the time you’re in a debt of despair and going to Citizen’s Advice, it’s too late for that. So get yourself organised much more quickly and get some sensible advice early on.”
Is there anything they would tell those embarking on their own financial journey?
“Absolutely,” Tania says. “We’ve got two sons and both of them we’ve hammered into them, get your savings sorted.
“Make sure you put a part [of your income]away each month and to make sure that you’ve got yourself covered with pension and insurance. They’re vital – these days especially.”
Paying off a mortgage is wonderful!