Our generation of ‘tomorrow pensioners’ are inundated with money troubles, with a quarter of over 50s afraid of losing their homes because they can’t keep up with the payments.
Age UK carried out the research and proved that while the best plans start as early as possible, it’s never too late to sort your future finances.
The first step is to tackle the basics: pay off any debts and reduce your bills. Cutting out any outstanding liabilities should be a priority and it is advisable to pay off your most expensive debts first – usually on credit cards. If you have a good credit score, look to move any loan balances to a 0% credit card, Barclays Platinum card offers an incredible 27 months interest free on transfers.
Clearing your most expensive debt does not mean ignoring all other debts however; you’ll need to pay off the minimums to maintain a good credit rating. Clearing your mortgage is another priority, as you’ll need a roof over your head when you reach retirement. Consider downsizing to release more cash if necessary.
If you are struggling to cope with repayments, organisations such as the Citizens’ Advice Bureau and the Money Advice Service can offer free advice and help you claim any relevant benefits.
It is also important to take advantage of any tax relief and employer contributions available – typically this boils down to pensions or individual savings accounts (ISAs).
In general, ISAs are the more flexible option as you can dip in and out when you like and your money grows tax-free. Having said this, the majority allowance will need to be in stocks and shares rather than cash. Pensions are less flexible, as you can’t touch the pot at all, however you do benefit from initial tax relief on contributions and if you have an employer matching those contributions, you stand to save a lot more.
For more advice on organising your finances it may be worth speaking to a qualified accountant. To find out how they could help, please see our Personal Finances page.
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