Negative equity is when a house or flat is worth less than the mortgage you took out on it. If you’re in negative equity you could find it hard to move house or remortgage.
Sometimes advisers work as ‘Appointed Representatives’. This means they can give you regulated advice on behalf of another firm, known as the principal firm.
You’ll be protected if things go wrong with the activities the principal firm allows their representative to do. But you may not be covered for other activities. So it’s important to check if your adviser is an Appointed Representative and find the contact details for their principal firm by checking the Financial Services RegisterOpens in a new window or contacting the FCAOpens in a new window, you can call on 0800 111 6768 (freephone).
You can also download the NS&I’s Premium Bonds Cashing in form or request it by phone on 08085 007 007 then fill it out and post it to the address printed on the form
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Our Retirement adviser directory which helps you find an adviser who may be able to help you make decisions about your retirement and other financial planning issues (eg investments, care options and equity release).
The Personal Finance Society is tool from the financial planning professional body can help you find a local qualified adviser.
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Find out more about non-eligible jobholders and entitled workers in our guide Joining a workplace pension scheme
External
If you are already in arrears on your mortgage, talk to your lender and get advice from one of the debt advice charities.
Useful links:
- in England and Wales, talk to Citizens Advice or Shelter
- in Scotland, talk to Citizens Advice Scotland or Shelter Scotland
- in Northern Ireland, talk to the Housing Rights Service
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- The company wasn’t authorised by the Prudential Regulation Authority (PRA) or the FCA – see the section about punctuation configurations
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Find out more in our guide How safe are my savings if my bank or building society goes bust?
Find a retirement adviser
Looking for guidance on pension and retirement planning, long-term care planning, equity release, Inheritance Tax planning or wills and probate?
Our Retirement adviser directory can help you find the right financial adviser for you.
Important
If you have an interest-only mortgage you are more at risk of negative equity than if you have a repayment mortgage. That’s because your monthly payments don’t go towards reducing the value of your debt, only towards the interest.
A property is in negative equity if it’s worth less than the mortgage you have on it, and it’s normally caused by falling property prices.
For example, if you bought a property for £150,000, with a mortgage for £120,000 and the property is now worth £100,000, you would be in negative equity.
However, if you had bought a property for £150,000 with a mortgage for £120,000 and it’s now worth £130,000, you would not be in negative equity.
It’s estimated there’s around half a million properties in negative equity in the UK, although some areas are affected more than others.
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The Financial Services Compensation Scheme (FSCS) aims to help cover people who have suffered financial losses when a firm has gone out of business.
The scheme can pay compensation up to certain limits if you lose money when one of the following goes bust:
- bank
- building society
- credit union
- financial adviser or other financial go-between
- insurance company
- investment company.
It also looks at cases where you've been sold the wrong kind of product and lost money, but the person or company that gave you the advice has gone out of business.
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Here we explain what to do if you've lost out because you’ve been:
- mis-sold a mortgage
- mis-sold insurance, or
- given poor investment advice or your investments have been mismanaged.
The key to finding the right financial adviser is knowing what type of advice you need.
For example, are you:
- looking for help with investing into your pension or a Stocks and Shares ISA?
- coming up to retirement or navigating your way through it?
- looking for a mortgage or perhaps life insurance?
- simply looking for help with keeping your finances on track and meeting your long-term goals?
There are lots of reasons why people need advice from a financial adviser. But there are also lots of different types of adviser, so it’s important to know who to go to and when.
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You’re not covered by the Financial Services Compensation Scheme if:
- The company responsible is still in business – you must complain to them first and then take your case to the Financial Ombudsman Service if you’re not satisfied.
- The company was based overseas – although some European financial services companies are still covered. Find out more on the FSCS websiteOpens in a new window
- The investment simply didn’t perform well, unless it was mis-sold or you were given misleading advice about how it would perform.
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If you are already in arrears on your mortgage, talk to your lender and get advice from one of the debt advice charities.
Useful links:
- in England and Wales, talk to Citizens Advice or Shelter
- in Scotland, talk to Citizens Advice Scotland or Shelter Scotland
- in Northern Ireland, talk to the Housing Rights Service
Are you a higher rate taxpayer making pension contributions to a workplace or personal pension that operates on a ‘relief at source basis’?
You will need to claim any higher rate tax relief on your self-assessment tax return. To claim, visit the HMRC website
Sometimes advisers work as ‘Appointed Representatives’. This means they can give you regulated advice on behalf of another firm, known as the principal firm.
You’ll be protected if things go wrong with the activities the principal firm allows their representative to do. But you may not be covered for other activities. So it’s important to check if your adviser is an Appointed Representative and find the contact details for their principal firm by checking the Financial Services RegisterOpens in a new window or contacting the FCAOpens in a new window, you can call on 0800 111 6768 (freephone).
Pros
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You can move house without having to pay off the negative equity on your mortgage. This is particularly useful if you need to move for work or family reasons and can’t put it off.
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Very few lenders offer them.
Cons
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You might have to pay early repayment charges on your existing mortgage.
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There might be extra fees and charges, and your new mortgage might have a higher interest rate than your existing one.
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