Those who are inheriting what is given to them in a will could be left with more than they bargained for, according to a study carried out by Saga. Nearly one million homeowners are now reportedly still making mortgage repayments, beyond the age of 70.
Though retirement and later life should be a time to relax and enjoy the hard earned investments they’ve gained, many older people are suffering as a result of shortfalls in endowment policies taken out in the 80s and 90s.
Research gathered by the over 50s advice and service provider, Saga, has revealed the average outstanding mortgage repayment amount for people in their 70s is an estimated £38,000 per household. This makes the total national mortgage debt for this age group an estimated £35.2 billion.
According to the survey, many of the home owners intended to clear their interest-only mortgages with an endowment policy. However nearly 70% claim the policy is not performing as expected and over a third are being forced to sell their homes in order to acquire the right level of funds.
As a result, many people over 50 in this situation will be leaving reduced assets to their loved ones. In some cases, the unfortunate beneficiaries may even be left with the unexpected mortgage repayments still outstanding.
Wills and probate professionals are advised to analyse the circumstances of their older clients vigilantly. Smart investments, clear financial plans and accurate division of assets within wills are integral to ensuring the welfare of both the clients and their families is protected.
Many consumers are now turning to equity release in an attempt to avoid selling their property. This could establish a greater uptake in the services of alternative business structure (ABS) firms. Rather than seeking advice from separate service providers, home owners are likely to put their trust in a firm that is able to deal with both property investments, as well as wills and probate issues.
Having recently been given powers to gain licencing to perform probate work, accountancy firms may become the chosen target for older people seeking professional advice in this case.
What other pathways can be taken to protect investments? Has your practice experienced the impact of these endowment policy shortfalls with clients?
