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    • Fledgling40
    • By Fledgling40 11th Nov 17, 11:51 AM
    • 6Posts
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    Fledgling40
    Frivolous, ageing parent - financial advice
    • #1
    • 11th Nov 17, 11:51 AM
    Frivolous, ageing parent - financial advice 11th Nov 17 at 11:51 AM
    Hi, hoping I can get some advice.

    My mum is around 10 years away from retirement and has no formal plans, savings or substantial pension.

    What she does have is about 4 years of a pension, a pot of money from downsizing mortgage free (it’s prob less than £50k) and no job atm due to relocation.

    From her perspective she’s more affluent than she’s ever been and whilst being out of work she’s getting very spendy. Every time I see her there’s a new item in her house or that she’s wearing, or waiting for delivery of.

    She’s not worried due to the cash sat in her bank, but she could easily live another 30 years. And there’s no contingency for illness, or anything else that could happen.

    I’m really worried about her. I’d like her to get IFE but a quick look online I get quotes of £500 fees. She can be very shortsighted/tight and doesn’t seem to understand what benefits and peace of mind she’ll get from getting advice. She just seems to think so long as she can cover the bills she’ll be fine.

    Am I missing any support I can direct her too?
Page 1
    • pip895
    • By pip895 11th Nov 17, 12:04 PM
    • 427 Posts
    • 232 Thanks
    pip895
    • #2
    • 11th Nov 17, 12:04 PM
    • #2
    • 11th Nov 17, 12:04 PM
    Do you mean IFA? Most unfortunately wont be interested for only a50k pot.
    • xylophone
    • By xylophone 11th Nov 17, 12:22 PM
    • 23,400 Posts
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    xylophone
    • #3
    • 11th Nov 17, 12:22 PM
    • #3
    • 11th Nov 17, 12:22 PM
    Has she obtained a new state pension statement?

    https://www.gov.uk/check-state-pension

    If so, what does it say?

    Is she looking for another job? If so, she'll almost certainly have a pension scheme that she can join.

    What kind of pension is the "4 year pension"?
    • Fledgling40
    • By Fledgling40 11th Nov 17, 12:45 PM
    • 6 Posts
    • 5 Thanks
    Fledgling40
    • #4
    • 11th Nov 17, 12:45 PM
    • #4
    • 11th Nov 17, 12:45 PM
    Thanks for the replies. She’s looking, yes but has mentioned part time. Shes always been under the national average salary.

    I’ll get her to check her state pension and no, I don’t know what her private one is, but she won’t have had much to pay in as she had a mortgage until very recently.

    I’ll be honest, I don’t have a great amount of knowledge myself. So maybe the IFA is the wrong service. I’d just like her to get some financial advice on how and what she needs to do to best provide for her future.
    • AnotherJoe
    • By AnotherJoe 11th Nov 17, 1:32 PM
    • 7,562 Posts
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    AnotherJoe
    • #5
    • 11th Nov 17, 1:32 PM
    • #5
    • 11th Nov 17, 1:32 PM
    1. Ask her when she plans to retire, and work out if she'll be able to cope on SP.
    2. Point out the free money she can get, by saving into a pension now (Once she starts working) and paying much less tax when she withdraws it. eg if she saves £800 now, that will be bumped up to £1,000, when she withdraws that she might end up paying about £100 tax or less so that's a free £100 at least.
    3. Point out that she can still get free money now even if not working, if she pays £2,880 into a pension the government will kindly make that up to £3,600.
    Last edited by AnotherJoe; 11-11-2017 at 1:45 PM.
    • bigadaj
    • By bigadaj 11th Nov 17, 4:16 PM
    • 10,671 Posts
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    bigadaj
    • #6
    • 11th Nov 17, 4:16 PM
    • #6
    • 11th Nov 17, 4:16 PM
    Thanks for the replies. She’s looking, yes but has mentioned part time. Shes always been under the national average salary.

    I’ll get her to check her state pension and no, I don’t know what her private one is, but she won’t have had much to pay in as she had a mortgage until very recently.

    I’ll be honest, I don’t have a great amount of knowledge myself. So maybe the IFA is the wrong service. I’d just like her to get some financial advice on how and what she needs to do to best provide for her future.
    Originally posted by Fledgling40
    It's difficult to get advice on smaller sums, sites like this are useful for many.

    Direct her to read up on here, there's the money advice service as well, but her situation could be worse as much advice is for those heavily in debt which she doesn't appear to be.

    Maybe explain to her how little she really has by dividing the money she has by 30, and check the pension situation for the future.

    Direct her to this site but you might need to be careful given the title you've made for this thread.
    • kidmugsy
    • By kidmugsy 11th Nov 17, 4:32 PM
    • 9,830 Posts
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    kidmugsy
    • #7
    • 11th Nov 17, 4:32 PM
    • #7
    • 11th Nov 17, 4:32 PM
    She’s not worried due to the cash sat in her bank, but she could easily live another 30 years.
    Originally posted by Fledgling40
    About 50% of women her age will live longer than that.
    Free the dunston one next time too.
    • Argghhh
    • By Argghhh 11th Nov 17, 6:35 PM
    • 352 Posts
    • 251 Thanks
    Argghhh
    • #8
    • 11th Nov 17, 6:35 PM
    • #8
    • 11th Nov 17, 6:35 PM
    make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them
    • Silvertabby
    • By Silvertabby 11th Nov 17, 6:45 PM
    • 1,782 Posts
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    Silvertabby
    • #9
    • 11th Nov 17, 6:45 PM
    • #9
    • 11th Nov 17, 6:45 PM
    make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them
    Not so. She owns a mortgage free property.
    • Fledgling40
    • By Fledgling40 11th Nov 17, 7:28 PM
    • 6 Posts
    • 5 Thanks
    Fledgling40
    Thanks all, so the consensus is there’s no professional/private body who can advise her or help her map out a retirement plan? I’ve been searching and found SOLLA, but not sure if they’re reputable.
    • greatkingrat
    • By greatkingrat 11th Nov 17, 7:46 PM
    • 66 Posts
    • 72 Thanks
    greatkingrat
    make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them
    Originally posted by Argghhh
    I would say that is the last thing to worry about! No point putting money aside for a funeral if you don't have enough to live on in retirement in the first place.

    As she owns her own property, there is always the option of equity release at some point in the future to supplement whatever pensions she has.
    • charoniv
    • By charoniv 11th Nov 17, 7:54 PM
    • 86 Posts
    • 25 Thanks
    charoniv
    >> She can be very shortsighted/tight and doesn’t seem to understand what benefits and peace of mind she’ll get from getting advice.

    Seems that she has piece of mind at the moment.
    Be careful that you don't end up causing her to worry about this and are you sure it's not your own piece of mind that you are concerned about.

    I have friends that have spent their lives living beyond their means - but something always seems to happen to get them out of a jam. In the meantime they have a lot of nice holidays.
    I have other friends who deny themselves luxuries because they aren't sure they can afford it - sure they have more money that they are lending to banks but who is to say what is best.
    Note: I have other friends who have lived like the first lot and who haven't been as "lucky" so I'm not advocating it - just saying it is a choice and there's not a lot you can do about it unless they want to change.

    My first mortgage was repayment because I was worried about debt. Had I taken out an interest only I could have used the extra money at the time and now that mortgage could have been paid off from petty cash.
    • pjcox2005
    • By pjcox2005 11th Nov 17, 7:57 PM
    • 474 Posts
    • 522 Thanks
    pjcox2005
    Thanks all, so the consensus is there’s no professional/private body who can advise her or help her map out a retirement plan? I’ve been searching and found SOLLA, but not sure if they’re reputable.
    Originally posted by Fledgling40
    Not investment advice but citizens advice bureau may be worth a try:

    https://www.citizensadvice.org.uk/debt-and-money/pensions/nearing-retirement/preparing-your-finances-for-retirement/

    Will have experience on budgeting, working out what pensions she’s got and mapping it out etc. Could be a good starting point so that she is thinking of how she’ll cope in retirement.
    • Alexland
    • By Alexland 11th Nov 17, 8:11 PM
    • 647 Posts
    • 406 Thanks
    Alexland
    Realistically if she is going to have an adequate retirement then it's going to be a 3 pronged strategy of private pension (what has she got, could she add more and how will she draw it?), state pension (has she got a forecast and could she buy more?) and releasing money from the property.

    An IFA or Citizens Advice could help or you could spend time getting really clued up in these areas to help her get the best outcome.

    A property is usually a substantial asset so great care must be taken in arranging the release of money.

    I assume you are not expecting an inheritance.

    Alex
    Last edited by Alexland; 12-11-2017 at 9:37 AM.
    • 117pauline
    • By 117pauline 11th Nov 17, 8:35 PM
    • 419 Posts
    • 5,164 Thanks
    117pauline
    Hi

    My first question would be - does she see this as a problem? Does she actually want your help?

    As a woman of her age, I would suggest you should be very careful at the way you offer your "help" as your thread title of"frivolous, ageing parent.. financial advice" is extremely patronising.

    Have you just tried talking, rather than thinking "She can be very shortsighted/tight and doesn’t seem to understand what benefits and peace of mind she’ll get from getting advice".

    I do understand your concerns but I ask you to think about the choice of words which will reflect your beliefs about your mum. You are being very judgemental as well as patronising.
    Don't get it perfect - Get it going
    Better Than Before
    • PasturesNew
    • By PasturesNew 11th Nov 17, 8:45 PM
    • 60,665 Posts
    • 354,664 Thanks
    PasturesNew
    Here are the facts:
    - if she runs out of cash before she retires she'll have to sign on or get a job. Tough, but she'll live.
    - if she spends all her money and is at retirement age she'll get the old age pension and will have to cut her cloth. Many thousands live on that, she'll live.

    While I can see you're worried about her blowing all her cash on frivolous things .... it is actually her money/life and she is making that choice.
    • ermine
    • By ermine 11th Nov 17, 9:44 PM
    • 604 Posts
    • 881 Thanks
    ermine
    Thanks all, so the consensus is there’s no professional/private body who can advise her or help her map out a retirement plan? I’ve been searching and found SOLLA, but not sure if they’re reputable.
    Originally posted by Fledgling40
    The problem is your mother doesn't have enough money to retire. End of story. Though she may be able to run down her assets in the home. Depends where it is. Her liquid assets of 50K is nowhere near enough. That's all you need to know, sadly.

    OTOH there aren't any pockets in a shroud...
    • badmemory
    • By badmemory 11th Nov 17, 9:54 PM
    • 940 Posts
    • 975 Thanks
    badmemory
    Do you know for certain how much money she has? Can you be sure she hasn't for once in her life set aside some fritter money? If she is used to being 'tight' she isn't going to throw it all away overnight. As for ageing parent, if she still has 10 years to go to retirement so mid 50s, how condescending!
    • Sarastro
    • By Sarastro 11th Nov 17, 11:08 PM
    • 223 Posts
    • 160 Thanks
    Sarastro
    Why do you think she needs support? People are allowed to be stupid with their money. Sounds more like she's not living by your values so there must be something wrong with her? Maybe this is the first time in her life she's not had to worry about managing day to day and she just wants to be irresponsible for a while? Maybe she's always been irresponsible? Maybe she just doesn't mind. Who knows...clearly you don't because you haven't bothered to ask her.
    • justme111
    • By justme111 11th Nov 17, 11:24 PM
    • 2,854 Posts
    • 2,738 Thanks
    justme111
    The problem is your mother doesn't have enough money to retire.
    Originally posted by ermine
    The above seems very wrong- if she all her life were close to minimal wage and managed to bring up a child and pay a mortgage she will probably be very happy on a SP.
    OP, as someone mentioned citizen advice could be helpful but if she does not think she has a problem then your suggestion of it may be not exactly welcomed and futile. Besides , from what you are saying it is unclear whether she actually has a problem. I would advise to familiarise yourself with her financial situation (if she welcomes your nonjudgemental and nonintrusive interest) and then give her some pointers if you think her affairs could be managed better. In order to be able to fo it you would have to learn about it yourself- do it for both yours and mother's sake.
    I am not sure what you mean "no contingency for illness" - she has money in the bank- what ither contingency you would expect? Besides she does not work anyway now so it is not as if her income suddenly dropped due to illness.
    There is nothing wrong with a belief that as long as one can cover the bills one will be fine - why do you disagree with it ?
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