Well, now, it’s been nearly six months since my last post: probably the wettest six months I can remember (although I don’t claim to have an eidetic memory – especially for the weather). The drought declaration well-and-truly worked: slap on a hosepipe ban and wait for the rain. A whole summer of it.
As ‘strongly recommended’ by our Financial Adviser (God bless his little cotton socks!) we took out a PEP (latterly converted into an ISA) to pay off the capital of our mortgage. At first, everything was hunky-dory – the amount built up (very slowly) and the attached Life Insurance gave us a warm feeling inside (as did the PPI, but that’s another matter).
Then the sh*t hits the financial fan and we begin to get ‘high risk of a shortfall’ notices. Not an issue, as we had the sort of mortgage that allowed us to ‘pay down’ the capital until we only owed the minimum (which cost us under a fiver a month for the Interest). As long as we were saving, why worry?
Then I started doing the math. We were putting over a grand into the pot and the surrender value was falling. Given the dire threats from the Financial Markets about the impending melt-down in the stock market, I thought ‘Why am I paying them to lose my money for me?’ I would be better stuffing my subs into a carrier bag and keeping them under the mattress – they’d only lose then at the rate of inflation, rather than paying some financial fat-cat to lose value for me. Hence I cancelled my ISA and got a pay-out. As long as I keep enough under the mattress to pay off the balance of the mortgage, I could now spend the rest, and given the rate it’s losing value, I might as well…
Both myself and SWMBO have been paying in for years to pension schemes. The idea was to give us enough money for a comfortable retirement in a nice villa on the Costa Packet. It’s not to be. Although the ‘projected’ payouts are still increasing, year on year, projections by no means keep up with inflation, and, if the bottom falls out of the S&S market, we could end up working forever…