Asset rich - fun poor!!

Jake'sGran

moonrakerz wrote:

Very disturbing programme on Television a couple of nights back about the pitfalls of moving abroad when you are under pension age. Make sure you have adequate health insurance or a "bolt hole" in the UK if you need treatment.

I saw that programme and was a bit surprised. I thought that as EU citizens the people who'd set up home there were entitled to health care but not so apparently unless they are over 65. Also, after two years of living in Spain, these expats were not entitled to free treatment on the NHS if they returned to the UK either. This came as a real surprise to me. The moral of the story seemed to be to keep a home in the UK but, of course, lots of people do not have the capital to be to do this. We have thought for some time now that the best idea is to winter in the sun and have summer in the beautiful UK. If global warming continues at the pace it is going now southern Spain will be too hot for anyone to be able to live there (in the news last week).

Ian_W

Sue,
As you don't wish to avoid IHT to leave all your cash to offspring, family and friends the Will situation should be quite simple and not involve any palava with Trusts etc. Bequests to charities are in themselves exempt from IHT so there is no problem with leaving specific bequests up to the nil band rate [currently I think £285K moving to £300K in April] and the residue of your estate to charity. You decide the good causes to benefit rather than Gordon or his successor!

Me and Mrs W have just redrawn our Wills in that format - up to the max nil band is split between 4 beneficiaries, anything above it is divvied up to 6 charities. If the individuals concerned can't manage with around £75k [or more] each when we've both slipped off the plate - that's tough !!!!!!.

I'd disagree with lisyloo that equity release is poor value - it was - but as it's becoming more mainstream I think it is becoming better value. In fact read something in the paper to-day that rates below 6% are becoming much more the norm, which when you compare it with most lenders SVR can't be too bad - especially as the lender may not get a penny back for many a long year.

But it does, generally, get to be better value the older you are. So why not spend the inheritance first - then think about equity release?

EdInvestor

Ian_W wrote:

I'd disagree with lisyloo that equity release is poor value - it was - but as it's becoming more mainstream I think it is becoming better value. In fact read something in the paper to-day that rates below 6% are becoming much more the norm, which when you compare it with most lenders SVR can't be too bad - especially as the lender may not get a penny back for many a long year.But it does, generally, get to be better value the older you are. So why not spend the inheritance first - then think about equity release?

I agree. If the 100k is likely to be some way off and you'd like extra cash now, then I'd suggest that you look into getting a "drawdown" equity release plan.This means that you only take money out as and when you need it, not a big lump sum at the start.It prevents the interest rate on the money borrowed rolling up too quickly.

ER plans are getting more competitive as time goes by as Neil says, so you could look to "remortgage" the ER plan in a few years' time at a lower interest rate, and with a higher drawdown limit, as you would be older and the house might be more valuable.So try to get a plan with low redemption fees as well.

When the 100k kicks in, you could also look at converting the ER into an offset mortgage, if the deals were better.