World News South Korea reports record Covid deaths as daily cases surge past 600,000 by Redazione 15 Marzo 2022 written by Redazione 15 Marzo 2022 3 minutes read Share 0FacebookTwitterEmail 56 As the cost of living crisis deepens, you may be assessing your regular monthly outgoings and looking for things you can cut back on. If you are lucky enough to be a homeowner, your biggest monthly expense is likely to be your mortgage. But will your lender allow you to reduce your payments if you explain that you are struggling? And how will that affect your credit record? Similarly, if you have life insurance or a pension, can you take a break from your payments, and what will the consequences be? Taking a break from your mortgage According to UK Finance, the trade association for banks, mortgage lenders should offer “forbearance” to any customer who is in financial difficulty or unable to make their mortgage payments. This could take the form of an authorised payment holiday, where your lender gives you permission not to pay your mortgage for a short period, usually up to three months. Alternatively, with your lender’s permission, you may be allowed to reduce your monthly repayments. It can be tempting to cut pension contributions when money gets tight but you are losing more than just your own contribution These arrangements come at a cost. Any payment holiday will be noted on your credit record, which could have implications the next time you want to borrow money – you may, for example, be charged a higher interest rate. You will also be expected to pay back everything you have missed paying once you are no longer in financial difficulty. Your mortgage is likely to cost you significantly more in the long run. Cancelling life insurance premiums LV= allows this – but you can only benefit if your policy (for income protection, critical illness or life insurance) has been in force for a year or more, you have a good history of paying and are less than three months behind with monthly premiums. You must declare that you have suffered a significant drop in your income or that your usual earnings have stopped. The payment break will only be offered for a month at a time, for up to three months. If you do find yourself in a position where you have to cut or stop your contributions, try to resume them as soon as you can. For example, it says a 33-year-old with £250,000 of life cover, paying £21.86 a month, could reduce their payments to £4.17 a month for six months. However, the maximum that could be claimed during this six-month period would be only £10,000. Cutting your pension contributions You may also be considering reducing or stopping your pension contributions for a while. This may ease your financial pressures a little in the short-term but it will reduce your income in retirement. Cutting £693 a year from your pension will mean £1,284 less goes into your fund. If that money manages to grow by 5% a year until you retire, the long-term cost is even greater. Hargreaves Lansdown, an investment platform, estimates that a 40-year-old basic-rate taxpayer who cuts back on their pension payments in this way – reducing their contributions by only £57.75 a month for only one year – would end up £4,569 worse off, before fees, by the age of 67. newssoledadworldworld wide Share 0 FacebookTwitterEmail Ti potrebbe interessare anche... Chris Cuomo seeks $125m from CNN over alleged wrongful termination 15 Marzo 2022 Canada and US announce Arctic military exercises amid Russia tensions 15 Marzo 2022 China property shares soar on Beijing stimulus, despite continued debt crisis 15 Marzo 2022 Powerful Japan earthquake strikes off coast of Fukushima, cause disaster 15 Marzo 2022 Giant New Zealand potato is not in fact a potato, Guinness World... 15 Marzo 2022 Survey suggests four in five Australian parents support diversity education 15 Marzo 2022 Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.