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"Gus Cairns talks to Chris Morgan of positivefinance.com
 Illustration: Raffaele Teo |
"I started positivefinance.com in December and I've already got the same traffic coming to the site as to pinkfinance.com, which is two years old," says Chris Morgan.
"The typical enquiry I get goes something like this" Morgan explains: "I've spent my savings, I've cashed my endowment, I've maxed my credit card - but I've got the Right to Buy - how do I start getting a mortgage?'" Many pos people never expected to think about retirement and are now having to play catch-up during an economic downturn.
Everyone goes on about property as being the only thing still showing a decent return on investment (despite recent falls in prices), and many pos people do indeed have Right-to-Buy due to being housed by local authorities during the Aids days. There is currently a rush into Right-to-Buy as on 23 January the Government announced it intended to cut the maximum discount from £38,000 to £16,000.
Actually
getting a mortgage in itself in not necessarily more difficult for a person with
HIV than anyone else. The assumption that lenders will always ask about whether
you've tested for HIV is wrong.
"Many mortgage lenders," writes Chris on positivefinance.com, "accept applications without conditions of life assurance - it's just a case of knowing whom to approach. Meeting their financial criteria is all that matters. They will ask for proof of income in the form of wage slips." Self-employment is more tricky - you need two or three years' audited accounts - and no lender will give a mortgage to someone on benefits unless they have another source of income.
However, you will still need mortgage payment protection if you get sick - or your partner will need it if you die. The mortgage insurance sickness policies currently on offer specifically exclude HIV - though ones that cover unemployment are worth getting. Furthermore lenders earn a nice 'extra' on selling mortgage protection sickness and life insurance policies and some may suddenly get less keen to lend if you explain you don't want insurance.
Jim bought his council flat under the Right-to-Buy scheme in January 2002. "It's a pretty low-risk situation for the lender as the local authority discount effectively acts as a hefty deposit. I just told them I wanted to make my own insurance arrangements. After I got the mortgage I took out some savings schemes with the same lender and told them I was HIV positive - they weren't bothered."
Charlene, however, had a less positive experience. "I'm positive and my husband is negative. We needed to use our joint income to buy a house. When I told them I didn't want to take out insurance they got really nosy and started asking intrusive questions about my medical history. I eventually had to go to another lender."
SavingsYou'll still need to provide your own security for the mortgage, however. Or you may not wish to go down the property-owning route at all but want to build up some financial reserves. Either way you'll need to start saving. Work out how much a month you can afford to put by, and once you've plumped for your scheme or schemes take out a standing order so you don't have to remember to pay in.
The best places to start at present are simple deposit accounts that offer interest, or cash ISAs (Individual Savings Accounts). The difference between the two is that with ISAs you don't have to pay tax on the interest you get.
With interest rates as low as they are, it pays to shop around. Some deposit accounts offer rates so low you actually lose money after you pay tax. Among the better options are the e-accounts you manage via the internet.
Cash ISAs have restrictions - you can only invest up to £3,000 in one year - that's £250 a month. However once you've saved your £3,000 there is no problem about taking out another ISA the following financial year and so on.
At the same time you can also invest up to £3,000 a year in a Stocks and Shares ISA - or up to £7,000 in a maxi-ISA which means you can't take out a cash ISA at the same time. We're in a bear market - stocks are till plummeting and no-one knows when they'll bounce back - but historically they always have done in the long term. "At present," says Chris, "you'll probably have to invest for 5-10 years to see a return on your savings. But this may be a better option than the long-term commitment of a pension for people with HIV."
Ah
yes, pensionsPensions have had nothing but bad publicity recently and may still seem like too much of a long-term commitment for pos people, who may feel fine about the next 10 years - but 20 or 30? Their one great advantage is that the government offers big tax breaks on your contributions so that for every £100 you contribute it will add in at present another £28.20.
However some employers' pensions may offer an unexpectedly good deal to pos people. Most will pay out if someone falls ill after a qualifying period - usually five years - and some will double your service, or more, in the event of permanent sickness. "Some schemes," says Chris, "effectively pay out on 10 or more years' worth of contributions if you fall sick after only making five years' worth." Others however offer Life Cover benefit - which means they'll start asking the same old Life Assurance questions. And employers' pensions are getting harder to come by - many employers don't offer them at all.
Stakeholder pensions are private ones regulated by the government. But you have to take the pension at a specific age - between 50 and 75 - so they need careful consideration if you're a pos person who is either much younger than 50 or so near retirement age your contributions won't add up to a big pot.
So
what about insurance?A recent Swiss study (see PN 89, page 33) concluded that pos people on treatment these days have similar life expectancies to people like cancer patients in remission who can get life insurance. A couple of US firms and a Dutch one already offer insurance to pos people - albeit at a heavily loaded premium. What's happening in the UK?
"I was surprised at the attitudes I initially encountered in the industry," says Chris. "I'd assumed that it was a question of their still believing pos people had a very limited life span and once you told them this was changing, they'd understand. But instead the attitude was that they accepted the financial risk arguments, but still didn't want to devise schemes for pos people - because they simply didn't like the idea of catering for this market." In other words, it was the same old prejudice he'd encountered against gay customers.
"However, I've seen progress in the last few months," he continues. "The reinsurers that sit behind the schemes seem to have accepted the arguments, but the High Street insurers have yet to embrace the market."
However, at present, if you've been diagnosed HIV positive you can't get life insurance, and things aren't going to change soon. If you already have it and then become HIV positive, however, most schemes will pay out in the case of your death. The same is not true of Critical Illness and Sickness Cover schemes, which usually have HIV/Aids exclusion clauses.
So at present the advice seems to be - get on the property ladder if you can, and whether you can or not, shop around for the highest-interest, lowest-risk savings schemes you can find. Happy futures!
You can contact positive finance at www.positivefinance.com
