As part of the BBC’s reports on The Downturn, they’ve posted a series of tips and further reading for helping cope with a recession.
The basic advice is to contact your lender as soon as you think you might have problems paying your mortgage. A lender must only consider repossession as a last resort after suggesting a mortgage holiday or extending the term or changing the type of mortgage.
If you’re getting a mortgage for the first time, or are remortgaging, make sure you get a mortgage which is suitable for you.
As most of us are probably now aware, savings of up to Â£50,000 are now guaranteed in UK regulated banks and building societies (each person gets their own allowance, so if you’ve got a joint account, Â£100,000 is covered). Of course, this applies per bank registration, and some banking brands will hold the same registration, in which case only Â£50,000 will be covered by these, even if you’ve got more than that saved with them.
If you’ve worked for your employer for more than two years (that’s continuously), you are probably entitled to statutory redundancy pay, of which the first Â£30,000 is tax free. Anything over this, and any unpaid wages or bonuses are likely to be taxed.
Looking for a job
Despite rising numbers of people being out of work, there are still 600,000 job vacancies available, so there should be a job out there for you, which even if it might not be your dream career, might tide you over until the job market picks up. Â Four out of five people who claim jobseekers allowance are off it within 6 months.
Make sure you’re paying your most important bills in the first instance (such as council tax and mortgage) and don’t be afraid to ask for help from someone like the Citizen’s Advice Bureau. Always be honest about your money problems.
If you’re approaching retirement and have most of your pension invested in the stockmarket (as opposed to cash and bonds) then you could have seen a big drop in the value of your pension, and there’s not much that can be done about this. However, annuity rates are currently very good (but that’s likely to change), so you might be getting a bit more annuity for your money if you’re retiring right now. You can shop around for your annuity, you do not have to buy one from your current pension provider, so it may pay to shop around.
There are plenty of useful links to further resources in the article, so I suggest you go and give it a read to help you prepare for the recession.
photo credit: secretlondon123