Negative equity invariably entails risk and, with it, worry. And if, for you, it doesn't, then it should.
That's the bottom line in asking where negative equity might leave you regarding your pension and savings.
Pensions workplace rather than state - and savings ISAs and special accounts in particular - COULD BE at risk if you fail to protect yourself. But losing out on these fronts certainly IS NOT inevitable.
With the help of those who have navigated the deepest and most treacherous of negative equity waters, the protection of your assets - and, with them, your financial survival - is a realistic expectation.
The understandable concern of anyone whose home is in negative equity is that if they sell at a price which falls short of clearing any outstanding balance on their mortgage, there could be very serious consequences. And when they start to ponder on the possible ramifications of a doomsday scenario in which their home may be repossessed by the lender, not unnaturally they are gripped by fear.
Will this affect their state pension? Might they lose out on any pension credits to which they are entitled? If they have not yet reached state pension age, could that play a part in what happens next? And what about the nestegg which they have worked so long and hard to provide?
In a nutshell, will any or all of their pension or savings be taken from them to offset their negative equity shortfall?
The simple answer is no. But the key to solving the problem is to act and act soon.
There's a myriad of things that anybody in this position can do that will benefit them in advance of entering into any debt negotiations.
Get help. Contact us, come and speak to us so that we can come up with a solution. As part of our process we'll go through any expenditure and examine all assets and liabilities. As a result, we'll know exactly where people stand financially, following which we will put together a proposal that the bank will accept.
People in this situation are worried that their pension and savings are at risk. And yes, potentially those things are at risk. We can't pretend that everything in the garden is rosy here; we can't be disingenuous because that isn't true and it isn't fair. So let's not mislead anyone; potentially, everything they have is at risk.
So what that person needs to do is come and speak to us urgently.
If this is where you find yourself, take heart from the fact that you are not alone. This is a common problem.
Most of those smitten by it are retired or are approaching retirement. The common link tends to be that they have an interest-only mortgage and that the time on it has either run out or else will do so in the near future.
Having dealt with a number of such problems, we know the territory well.
Thankfully, we have been very successful in resolving these situations. The process in addressing such problems is to get a really good handle on exactly where the client's finances are today and then giving them the advice that is required in approaching their lender to come up with a consensual settlement, an agreement to go forward with it.
To anyone in this position at the moment, our question would be, Are you worried about it?' If your reply is No', you ought to be and our advice to you would be to seek help right now in order to start doing the things that can be done so it can sorted out.
If you are concerned about how Negative Equity will affect your pensions or savings, get in touch with a member of the team today!