Finance Help For My Mum And Dad - Please...

janiemumoffive

Hi all,
I need some advice, for my parents; Dad is 61 and has been working alone from home for approx 17 years as architect (or whatever they are called now) He has very little in the way of a Pension and no savings whatsoever, Mum is 62 and works as a Laundry Person at the local hospital, part time. She brings home approx £80 a week. They have no mortgage but do have some debts on their credit cards (upto £5,000) and a car loan which I think costs them approx £350 a month! Dad suffered from a nasty heart attack three years ago and now has Angina, mum has thyroid trouble, arthritis, plus more and is struggling to keep at her job, which involves heavy lifting. Unfortunately whilst my dad is good at what he does, and is popular, the jobs he does are either very small ones which dont earn a great deal, or very big ones where no one seems to pay!! His income comes in dribs and drabs, he can go months with nothing...literally. Oh yes, mum has no pension.
They have considered moving to a smaller property, but to be honest they love their home and wouldnt make anything on the sale, so it would just end up as a swap, which doesnt raise any capital. Mum is considerably concerned for their future and is now thinking of going to one of those companys which 'let you borrow money from the future sale of the house' i.e. when they have died!??? And before anyone thinks I am concerned for my inheritance, it really is nothing like that. I love my parents and want them to be happy and secure now and feel at a loss as to how to help them. I am 6 weeks away from my divorce and on benefits, I have a little savings but they wont take it from me as much as I really want them to - they mean more to me than money, they have always been my good friends. Can anyone give us an idea of how they could securely raise money (are these companys ligit?), to pay off their debts and live a more secure and happy worry free life (if such a thing exists). With Dad being 61 and having Angina it would be alomst impossible for him to go out and look for a 'little job'
Desperately waiting for a miracle...

margaretclare

Hi Janie

You're thinking of equity release for Mum and Dad. Your first port of call must be the SHIP website (SHIP = safe home income plans). https://www.ship-ltd.org

There are 2 types, and the only one I know anything about is called a 'lifetime mortgage'. Basically, it's the same as any other mortgage except that you don't pay it off until the second of you dies. The interest rolls-up until then.

There are a couple of drawbacks. First, your parents are (relatively) young. We went down this route 3 years ago because we didn't want to be paying a mortgage until we were 83, but one of us had to be 68, then we were allowed to 'release' 25% of the equity. The mortgage is repaid when the house is sold after the death of the second survivor.

Yes, these companies are legit - ours is with Northern Rock, you can't get much more 'legit' than that!

These type of schemes are best considered as a last resort - usually the advice is given to 'downsize' where possible. It wasn't feasible for us - you can't 'downsize' much from a 2-bedroom bungalow - but if we'd had a large 3-bedroom house on 2 floors it would have definitely been an option.

One thing to consider - angina and arthritis. No matter how much they love their home, these type of physical conditions can make it difficult to live in a traditional type of home, 3-bed semi on 2 floors, for instance. Stairs can become a problem, also maintenance, gardening, climbing in and out of a bath, those type of things.

Your Dad has got to start charging properly for his services. The local Chamber of Commerce could be a place to start - what's the going rate? And chasing up the late payers is just good business sense. I always thought that architects made big bucks!! Seems like that's not the case.

And your Mum has got to stop heavy lifting!!! Can she retire on health grounds? See her GP - claim invalidity and disability benefits (I assume she's paying full NI contributions - please don't tell me she's not!!)

HTH

Margaret Clare

janiemumoffive

Hi, thanks so much for your advice, I am going to take a little time to absorb this and find out all the answers before I get back to you, you have given me some great starting points and I really appreciate it, will let you know how we get on...

savvy

Hi Janie
I'm going to move this over to the Silver Savers board as they may well have some more great help for you and your parents. Also don't forget to visit the Debt Free Wannabe for more sound advice.

Good luck
savvy