Wednesday 6th of October 2010
Seeking information from individual voluntary arrangement (IVA) FAQs may be a sensible step for older Brits who want to save up for their retirement but find unsecured debts are getting in the way.
According to figures from LV=, over-50s would be hit extremely hard by an increase in interest rates, if the Bank of England was to decide to implement the change.
Research by the firm shows if rates were to rise, 40 per cent of people aged over 50 who are still in work say they would be forced to reduce the amount they save into their pensions in order to afford the higher cost of paying off debts.
Furthermore, the study reveals 44 per cent of this age group also still have a mortgage to pay, despite nearing the age of retirement.
In addition, although 1.2 million over-50s want to use their home to help them fund their post-career lives, 54 per cent reckon the value of their dwelling has fallen significantly over the past three years, which would have a big effect on their plans for the future.
IVA FAQs could, however, show you there is a way of erasing your unsecured debts once and for all, freeing up income that can be put towards boosting your coffers.
The method of insolvency makes use of a series of around 60 monthly repayments that freeze interest and charges on the deficit, which could make getting back into the black a more manageable process.
However, it should be noted the measure is not available for secured debts - such as mortgages - and requires a lot of hard work and effort.
Commenting on the findings, Vanessa Owen, LV= head of equity release, says: "It's worrying that a rise in interest rates would force many people nearing retirement to reduce their savings.
"With the extra strain a rise in interest could bring, our research shows that many people believe their property is the best chance they have to fund a comfortable retirement, despite the recent fall in property values."
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