Fraser Sutherland: Mortgage advice for retiring people

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This report – research from Prudentialm – shows worrying levels of indebtedness for those heading into retirement, especially for Scots. If you are worried about debt in retirement you can start by doing the following.

First, find out exactly what your pension is going to be by contacting your employer or pension provider and looking at your personal State Pension Statement on the GOV.UK website.

You can track down any old pensions you have lost touch with by using the Pension Tracing Service. It’s estimated £15 billion is lost in forgotten financial products including pensions so make sure you don’t miss out on money you’re entitled to.

You should also check if you are entitled to state benefits you previously didn’t receive but now might be entitled to. Your local Citizens Advice Bureau can help you do this.

If you have a private pension speak to an Independent Financial Adviser about how best to use your pension pot and what kind of annuity best suits your needs.

It’s important to make sure you are aware of how your spending is going to change once you retire and draw up a budget that means you can afford necessary costs such as energy and food.

From this you can then work out what you can afford to pay back on your debts, prioritising rent or mortgage arrears as well as utility and council tax bills.

If your pension provides a lump sum it may be worth considering using this to pay off a mortgage or other debts but get specific advice from a qualified professional about your own circumstances.

Ensure that you contact the tax office to make certain you don’t pay too much tax once you retire, you should get a Pension Coding Form from HMRC automatically unless you’re self-employed in which case you will need to request it.”

• Fraser Sutherland is a policy officer with Citizens Advice Scotland