Pensioners need advise £40,000 lost

Algorfa45

Sorry if posted in wrong area, I have friends who reside in sheltered accomodation they had £100,000 invested but due to the credit crunch have lost £40,000 they are worried that they will have nothing to leave thier family son daughter and three grandchildren. Are they able to give the monie as a gift to their family now or will they get in trouble. one wishes to go ahead and give the monie to their children the other feels they will get into trouble with the housing or something.

Thanks for reading

Maria

CLAPTON

there really isn't enough information here

-do you own or rent the sheltered accommodation
-do they pay out of the own means or are they supported by tax payers
-what income do they have
-what is the money invested in

dunstonh

hey had £100,000 invested but due to the credit crunch have lost £40,000

To have lost 40% of their value, they must have more or less invested fully in the stockmarket at medium/high risk. Most pensioners are lower risk than that. The would still typically have seen a loss on unit linked investments but closer to the 15-25% range.

That said, some pensioners are still willing to take on higher risk but then look for guarantees on death. That way they keep the potential for higher returns but dont have to worry about short term fluctuations that higher risk investments carry.

Are they able to give the monie as a gift to their family now or will they get in trouble.

If they are on benefits then they will get in to trouble as any gifts would be deprivation of assets.

What they should do is find out about the investment and how it works. It is possible they have things like death guarantees on it or even a minimum return at a certain date. If there isnt, then its possible they were badly advised (depending on their age and amount of other savings and investments they have) as the risk is possibly unsuitable. Its really hard to say though as we dont have a lot to go on here.

margaretclare

They need advice, not advise....

It's a very incomplete story, isn't it? They have lost 40% of a £100K investment and yet are able to contemplate giving the rest of it away???

Is this money from savings, from a house sale, from an inheritance? Have they saved it as a 'rainy day' fund i.e. for their future possible needs, or is it only there to be left to 5 family members?

What was the money invested in, to have lost so much? And did they not take note of the warnings 'your investment may go down as well as up'?

If the remaining £60K was reinvested in more cautious and better-managed funds, wouldn't it be possible to regain some value?

purch

they had £100,000 invested but due to the credit crunch have lost £40,000

The credit cruch didn't lose the £40K. It was lost because they had it invested poorly.

Be_Happy

When you say 'lost' the money do you just mean a paper loss where the investments are valued at a lower amount just now as most stock market investments are? If so, is there a case of just waiting to see if they are going to rise again?

Another point would be that with investments of £100,000 they will surely be unable to claim any benefits at present, so any reduction of savings will only affect any future benefit claim they make and they will have to bear this in mind.