How much is 'enough' for a single pensioner?

margaretclare

Parsimonia wrote: »

I've not pulled any punches on the subject of equity release - I've told her until I'm blue in the face that she is crazy to contemplate it, and that she could end up losing everything. Not even to mention the dubious ethics...

Unfortunately she has a friend who keeps urging her to do it, and convincing her that it's the perfect solution and the answer to all her prayers. The friend makes it sound as though she gets to keep her cake and eat it - the friend has (erroneously) told her that she gets the entire value of the house paid into her bank, then carries on living rent/mortgage/cost free in the house until she dies, at which point the house is reclaimed by the bank to recover their investment. She keeps says that there will be money remaining in the bank from the equity release to provide an inheritance for the 4 children.

We've told her that's a load of tosh - that she needs to pay the interest on the loan, so it's not a case of living completely rent/mortgage free...but she thinks she's right and we're wrong. I printed off some factsheets from the web to put her right, she refused to read them...

Because the friend is encouraging her to do something she wants to do, whilst I on the other hand am urging her to do something she doesn't want to do, the friend is having considerable more influence...

Sigh.....

Just re-read this. No, she will NOT get the whole value of the house paid into the bank. We were only able to borrow 25% of the total value, which was just enough to clear the original interest-free mortgage, with which I'd been struggling since my first husband's death and my redundancy in 1992. In addition, the property has to be revalued, which is one of the costs you have to pay, and it's in the lender's interest to have this valuation pretty low. There are also the conveyancing costs, costs of survey, all the costs that come with buying a house all over again.

The idea is, you don't get to pay the interest on the loan in your lifetime, but it rolls up and is paid off on your death. We were well-advised, or fortunate, depending on how you look at it. The interest is pegged to the Bank Rate, but in other cases of people we've heard of, this hasn't been the case, it has been much higher than BR with obvious results. Much has been written on Martin's site on the topic of 'equity release'.

zygurat789

margaretclare wrote: »

Just re-read this. No, she will NOT get the whole value of the house paid into the bank. We were only able to borrow 25% of the total value, which was just enough to clear the original interest-free mortgage, with which I'd been struggling since my first husband's death and my redundancy in 1992. In addition, the property has to be revalued, which is one of the costs you have to pay, and it's in the lender's interest to have this valuation pretty low. There are also the conveyancing costs, costs of survey, all the costs that come with buying a house all over again.

The idea is, you don't get to pay the interest on the loan in your lifetime, but it rolls up and is paid off on your death. We were well-advised, or fortunate, depending on how you look at it. The interest is pegged to the Bank Rate, but in other cases of people we've heard of, this hasn't been the case, it has been much higher than BR with obvious results. Much has been written on Martin's site on the topic of 'equity release'.

Did you mean that?

margaretclare

No, of course it had been interest-only from 1990 to 2002.

Savvy_Sue

You can check the ownership of a property on the Land Registry website, and download a copy of the deeds for a small fee.

You can't always do that 'out of hours' but it's relatively straightforward if you can print them off.

That will tell you if the house is just in her name, or if there's any other interests registered against it.

zygurat789

margaretclare wrote: »

No, of course it had been interest-only from 1990 to 2002.

That would have been impressive money saving

margaretclare

zygurat789 wrote: »

That would have been impressive money saving

Yes, wouldn't it just? Especially as the interest rate was about 15% in 1990.

Thank you for picking up on my typo.

moneyistooshorttomention

Parsimonia wrote: »

I made the promise and I'll do my best to keep it if and when the need arises. I've been a nurse my entire working life (firstly in nursing homes and now I'm a sister in a large teaching hospital on a dementia ward) and I have more inkling than most what my promise entailed. She knows I couldn't do it if I'm still working, but given her excellent health and the fact that I'm 7 years from retirement, it's not unfeasible to assume that if and when she's infirm to the extent that she'd require round the clock care this will occur post-retirement rather than pre-retirement. And whilst providing live-in care will be impractical given our respective 1-bedroom properties, it takes literally 3 minutes to cover the distance from our house to hers, and with modern panic alarms and remote monitoring equipment, I could know within seconds if there was a problem, and reach her within minutes if she needed me in the middle of the night etc...

Where there's a will there's a way!

Also, she is fully aware that my promise came with one further very important caveat - my husband's health comes first, and if his health deteriorates to the extent that he needs nursing, then all promises are null and void.

Even so, I'd try to support her to remain in her own home rather than have her go into a nursing home for as long as I could...I was always taught that that's what families are for, to love and care for their weakest members in their hour of greatest need. I don't think that makes me gullible - gullibility implies I'm unaware that she may be undeserving, or unaware that she may be taking advantage of my better nature. I'm not unaware of either of these things...but I married her son for better for worse, and as he and I are the only members of her family who live close enough to take day-to-day responsibility, I don't feel able to shirk that responsibility.

She moved two hundred and sixty miles to be closer to us to give us her support when my husband became seriously ill, sacrificing in the process her close friendships, her proximity to her daughter and her siblings etc. It's meant that she's now somewhat isolated from the rest of her family (who apart from my SIL are all older than her, and not really up to long journeys to visit). She is our responsibility....no getting away from that, I'm afraid!

However, during this thread I've asserted several times that she's kind, but perhaps I should illustrate HOW she's kind, so that it's not just words. She takes in loads of ill, unwanted and abandoned animals - both wild ones and pets - and there are always at least 4 poor creatures that she is nursing back to health or helping to overcome behavioural problems from having been badly treated by their previous owners. She also fosters rescue dogs and cats - all of this in her little one bedroom bungalow. Moreover, she donates loads of her time and money to animal charities (she gallivants during the day with her well heeled friends, but at evenings and weekends when her friends' husbands are home and she's left to her own devices she spends her time knitting blankets for animal rescue, fundraising, doing charity carboot sales, hosting bakesales etc to raise money for her little animal charity).If there's ever a disaster such as seals being washed ashore or horses being mistreated, she's the first there with her wellies on offering her help and assistance - yes, they may be Barbour wellies, and she'll arrive in a cloud of Chanel No 5, but that doesn't stop her rolling up her (expensive, designer) sleeves and getting stuck in.

People are very complex - and she is more complex than most! I've never come across anyone quite like her - someone who wouldn't hesitate for a second to picking up a poor cowering dog that's covered in faeces and cradling it in her lap, not giving a hoot that she's wearing an Armani suit that cost more than I earn in an entire month.

So, you see, someone can do despicable and shameful things but still be kind and generous and caring. I think spending is a form of illness for her - a form of addiction - that makes her do unkind and morally unethical things (to her step sons). But she's still a decent person underneath. We just need - somehow - to break the addiction and 'cure' the illness, and I'm not convinced, yet, that she'd beyond redemption.

This week was the first time EVER that she's admitted she has a problem. She came to us and asked for our help of her own free will, and whilst it's not been easy, she's taken a huge step forward in giving us her credit cards and her cheque book and allowing us to delve into all the murky secrets of her finances. I think that's a really positive step forwards...and whilst I expect lots of steps backwards, and don't for a second think it will be plain sailing, I am optimistic that we can pull things back from the brink.

I know many of you think I'm foolish, gullible and a martyr and you probably think your advice is being ignored. I can assure you I've read every single response and it's given me lots of food for thought. I really do appreciate your input, and I hope I'm not coming across as a totally stubborn fool who's burying my head in the sand!

I understand the point you are making here and it is good that she is helping animals like this

BUT...I would tend to see this as her wanting to convince herself that she is a nice person (when she isn't really) and animals don't answer back (unlike humans).

I still see her as primarily selfish and determined to have what she wants regardless of anyone else.

I'm sorry, but I think you are seeing her as a nice person because YOU are a nice person (and therefore with a tendency to see other people as nice regardless) and not because she actually IS nice iyswim.

pineapple

margaretclare wrote: »

As regards selling the house and renting it back, this is not a good idea. She would have no security of tenure and could end up having rent increases and ultimately, eviction.

There are different types of equity lease - you can have a lump sum released from the value - no renting involved.
Age UK has an advice line. http://www.ageuk.org.uk/products/financial-products-and-services/equity-release/?id=&ito=5112&utm_source=offline&epslanguage=en-GB
Can I just say I have a sneaky admiration for her. My Dad saved all his life to buy his own home and ended up parting with the proceeds at a vast pace - living alongside others in the care home who hadn't a bean and who were therefore subsidised. On the other hand my gran was all fur coat and no knickers by the time she died - having spent two inheritances on fur coats and cruises! But by that time she didn't know what was happening anyway. Her choice to fritter it. Heck maybe not a bad choice either.

Katiehound

pineapple wrote: »

Can I just say I have a sneaky admiration for her.
QUOTE]

have you actually read the whole thread?
You have a sneaky admiration for someone who is not frittering their own money away! Oh no- she's intent on spending money that was intended for her 2 stepsons because it isn't actually her own money it was her 2nd husband's.

I have no admiration for her at all. She obviously has no one's interest at heart but her own. A very selfish, wasteful woman.

I'm wondering if you had the vital paperwork to take to the solicitor.......and what happened at the meeting.

sniffles

But how much money can a pensioner live on? Anyone?