21 / March / 2024 Common Sense - On Debt Awareness Week.

I'm an intelligent person, but seemingly lacking in common sense. When I got my first mortgage, it lasted for 25 years. In all those years, I never renegotiated the deal because I had no idea that I could.

The rate fluctuated wildly on what's known as an SVR, a 'standard variable rate', set by the mortgage lender. At one point in the early 90s, that was as high as 15%.

More than once over the 25-year span of that mortgage, I almost lost my home, as my outgoings, stacked by that mortgage, exceeded my income. To compound this, a tax bill arrived that I wasn't expecting, due to my band not having been registered for VAT but having received VAT payments. Something like that. I can't remember and didn't take any notice at the time.

I was called to a meeting with the HMRC in a depressing sub-brutalist building in Winchmore Hill. The 'advisor', and I use the term very loosely, looked at my ingoings / outgoings sheet, and remarked that, in those days of expensive landline calls, I was spending too much time on the phone. It was humiliating, not helpful. They told me that I had to sell my flat to pay what I owed. I pointed out that it was in negative equity, but it seemed that wasn't their problem.

Thankfully, I landed a 'proper job', which was miraculous as all that I had on my CV involved my time in the band. The odd jobs I'd had prior to that weren't cutting any mustard there. Slowly, very slowly, I paid off my debt and held onto my home.

But where was my common sense? Why didn't anybody tell me I'd been making a mess of 'adulting'?

And now, again, with retirement age looming in just under six years, am I prepared? Of course I'm not. There wasn't a pension fund being paid into during my years in music and self-employment, just the usual NI contributions. There's a pitiful annual sum of around the £3,000 mark, (and that’s not a typo), from my 7 years working in Higher Education.

I guess this post is a warning to others. You know those kids at school who said they weren't doing any revision for their exams, but then they got A's? Yes, they were revising. So, while we folk with little common sense merrily wander about seeing heaven in wildflowers, others are sensibly feathering their nests, as we should also be doing.

Thinking about pensions is boring, but it's essential. Keeping track of your mortgage rates (if you're fortunate enough to be on the housing ladder), is boring, but also essential.

Try this https://www.moneysavingexpert.com/