What's best long term buy or rent??

sally7216

We have no idea what to do on this one.
We are currently renting from housing association and my husband is full-time employed. I am however on benefits DLA, Incapacity and Industrial Injuries.
My husband is nearly 11 years older than me and is coming up to 59.
Being blunt - law of averages and all that he will die before me so would we be better off trying to buy something now say with an 8 year mortgage as we have some money to put down. Or would it be better for me if we stayed renting housing association as if he wasn't here I would get most of my rent and c. tax paid etc.

That's it in a nutshell where would I be financially better off in my own property or still renting?

clutton_2

do you have anyone to leave a house to ?

Person_one

If you're in a HA property you're as secure as if you were in your own, if not more so.

I'd stay put, if you're happy where you are.

jamesd

What are his pension and life assurances like? What survivor's benefits does the pension provide for a spouse?

The law of averages suggests that about half of all men aged 65 today will live to be 86 years old or older, so at 59 you're being a little too early to think of him dying. Unless he has ill health he's likely to outlive a 25 year mortgage term and there are some lenders who do mortgages that last well beyond state retirement age. And others who don't, so just don't use them.

Owning a property is one of the major factors that makes some retirees better off than others. It's also a major route for you to use to avoid living on means tested benefits for the rest of your life after he dies.

What I suggest you do is ask him to get a pension forecast and find out how much he'll get to use to repay a mortgage. Then find out how much the spousal benefits is after his death. If it's a type that involves buying an annuity there will be other options besides buying an annuity and if buying an annuity there are options about how much you'd get of the income after his death. Once you have the possible income figures you'll be in a position to work out what value of property is affordable. He should also get a state pension forecast to find out how much he'll get from the state pensions while he's alive.

Life assurance is the way to go to protect your ability to afford to live on money beyond whatever the pension will provide. You can roughly estimate that for each £1,000 a year of income you'd need life assurance that would pay out between £20,000 and £25,000.

You should also check what will happen to the different incomes you receive now when you're getting pension payments after his death or have insurance money invested to produce an income. Incapacity Benefit will probably stop but DLA and industrial injuries money might continue.

It's probably entirely practical to buy a place that will make you both better off while he's alive and also provide sufficiently well for you to live well after his death. Just don't go overboard on buying a gold-plated place well beyond what you really need and you may be able to get your monthly bills below those you're getting with the housing association.

sally7216

There isn't any life insurance James or private pensions. In fact by the time he retires he will not have paid up to 30 years national insurance so assuming the retiring age may be raised to 68 by then i still think he would be short on contributions so god knows what sort of state pension he would get. This was due to ill health in early years and then being a mature student for 12 years.

I will have paid all mine however because I worked for 28 years full time and my contributions are still being paid.

I understand what you are saying about life insurance being important but when we enquired a while back a lot of companies where reticent to give any as he has had cancer three times but not for the last 18 years however.

I think maybe I am beginning to answer my own question here and as someone else said I am more secure staying put, I am very happy here and do not have a reason to move. It was just an idea we had been thinking about.

jamesd

He should definitely get a state pension forecast. That will tell him his current and predicted position for both of the state pensions. In addition to working years he'll have been credited with three years of juvenile credits, I expect. What you get is (years that count) / 30 times the full basic state pension plus the amount of additional state pension based on contributions when working. The state pension forecast works all of this out for you.

No cancer for the last 18 years should make it possible for him to get life insurance. May take an insurance broker to find a suitable policy and it'll probably exclude causes related to the past cancer problems.