Fergus Muirhead answers your consumer questions
I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.
I'll be dealing with a selection of your queries every other Wednesday on Scotland Live, on Reporting Scotland and here on the BBC Scotland news website.
Please drop me a line here at email@example.com with your questions.
You can also read more on money and consumer issues on my own blog.
Q. We have a together mortgage with Northern Rock and a secured loan with Picture Finance. Mortgage is interest only, at the time when the we took the mortgage out, we are advised we could remortgage and include the secured loan But with the current climate, I think it may be unlikely. We are in our mid 40s now and really need to address the situation. Really need something in place to cover loans, mortgage and loans running for about five years, Karen McKinlay
A. The most important comment you make in your letter is that you realise you need to address the situation you find yourselves in. The fact that you realise the need to look at your situation usually makes it much easier to resolve. I'm sure you are not the only viewers hit by the tighter rules applying to mortgage further advances these days and so the situation you are describing is not unusual. You have a mortgage and a personal loan and if you release some of the equity in your home to repay the personal loan then you will end up with a bigger mortgage but lower monthly repayments since the loan will have a longer term and probably a lower interest rate as well. I'm not sure when you say that you want 'something to cover the loans' whether you are referring to something to protect you if something happens to either of you, or some means of repaying the loans? Both are important. You should have some life cover or critical illness cover in place to allow the loans to be repaid if something does happen, but you should also have some method of repaying the loans at the end of their term if they are currently set up on an 'interest-only' basis. It may be worth speaking to an Independent Mortgage Broker to find out whether you have enough equity in your home to allow you to take out some money to repay the other loans so that you end up with one loan. But if you do that you should really convert that mortgage to repayment so that you know it will be repaid at the end of the term. It may be that you will have to extend the term of the loan but your Broker will be able to help with that. Have a look at the Financial Planning Week website at www.financialplanningweek.org.uk for some advice on the importance of having a plan in place, not just to help with the repayment of the loans you mention, but so that you know where you are trying to go with your money and how some structure and planning can help you get there.
Q. I need some advice after seeing the recent government announcement in respect of raising the state pension age to 66. I was born on the 19th June 1955 and my husband on the 30th October 1953. Can you advise if we will both be eligible for the state pension at the age of 65? Sharon Russell
A. The very short, and happy for you I'm sure, answer to this question is 'yes'. You will both qualify for your State pension at the age of 65 under the planned changes to pension ages - unless the rules change again between now and then! For anyone else who wants to check when they will be eligible for State Pension Benefits then there is a calculator at http://www.pensionsadvisoryservice.org.uk/state-pensions/state-pension-age-calculator?
Q. I am a student at Heriot-Watt University in Edinburgh currently undertaking a project on marketing a savings account and just wanted to ask you for a little bit of information. Firstly, I read your 'Fergus looks at where to invest' questions and answers article on the BBC website which was published in January 2009 and I gathered that consumers were still very cautious about investing their money and were looking to put their money in a savings account instead, in spite of the low interest rates. I wanted your views on the present situation, now that the economy is more 'stable' than it was in January 2009. Are consumers still preferring to put their money in a savings account or are they more comfortable with investing their money? I have £1,000 that I would like to invest or put in a savings account but I am unsure as to what the best option for me would be. What would you recommend? Atif Hussain
A. The answer to your first question is that the markets seem more settled now than they were in January 2009 and many consumers are happier today to dip their toes in the markets and take a bit of risk with their money. Having said that, there is no one-size-fits-all answer to this question because there are still many investors who remain risk averse and will keep money on deposit rather than taking a risk with the market. There are several reasons for this. They may need the money for some sort of project in the very short term and believe that market volatility over that time period to be too much of a risk. They may have already had their fingers burnt and be unwilling to face a repeat of that if the market falls again. It may be that they are close to retirement and have already made gains over a longer period of time and so are content to sit on these gains until the money is needed. In terms of your second question it is, in part, tied in to the answer already given. I would want to ask you some more questions before giving you a definitive answer. How long to you intend to tie the money up for? How much risk are you prepared to take with it? Will you need immediate access? Is it your only savings or do you have other money to fall back on? The answers to these questions would determine whether you should keep your £1,000 on deposit and safe and accessible, or take a bit of a punt with it. The options available range from under the pillow to the 2.30pm at Newmarket and the right place for your money is likely to depend on how much it would upset you and your plans if you lost it all!