New pension rules query

barnsleynanna

Thank you all so much for your input. A lot of things to think through.... I'm sure a lot think it's a 'bonkers' idea but a lot of cultures look after their families, and I intend to try to do the same .. my family are my life ! Additional information, which I didn't really think relevant to my question, but of course is relevant to some of the answers... I currently work part time in an office (which I will retire from). I also work as a self employed proof reader, which I can do when I 'retire'. This work is done from anywhere with access to a computer and provides me with a regular income. My husband will also be employed by the same company when he retires, so effectively, aside from the private pension pot, we will have (until my retirement date) ...his state pension, plus two incomes from self employment which will pay our monthly bills. With regard to living in a mobile becoming 'old'.... I disagree. Our mobile home is one of the newest, with double glazing, central heating, and all mod cons. It's also, of course, all on one level, so the issues of having to get up and down the stairs as we get older would be less of an issue. The caravan site we are on is a privately owned site, with a very good community spirit and extremely good security. Most of our friends and neighbours intend doing the same as ourselves and staying there for most of the year after retirement. We feel safe and protected there, and amongst good friends. With regard to giving the money to children against their own property and staying there for a few weeks a year... would this really be an issue ? At most we'd probably be there for around 8 weeks.......... With reference to my personal pension, I hadn't intended even looking into taking it until age 55 of course, as those are the rules, and I'd probably leave it until much later to accrue .......thanks to everyone for the very interesting points made ....

barnsleynanna

Have thought about some of the points above and would add the following information, which may go some way toward explaining our train of thought. Yes, hubby is 10 years older than me ... I'll be nearly 55 when he retires and I'll continue to work as a self employed proof reader. This provides an income of around £200 per month, which is enough to pay for the caravan site fees. Electricity is extremely cheap at the van site, and gas is also reasonably price. Hence, the only outgoings we would have would be our car and caravan insurance. Regarding gifting the money to our daughter ... a little history. She was an army wife for many years, travelling all over the place. Her army husband treated her (suffice it to say), extremely badly and she had no option but to leave. Since she was abroad at the time, she wanted to return to the UK, but the local council told her that since she had made herself 'voluntarily homeless', they would not house her. She and my three grandchildren came to live with us and eventually privately rented. Some time afterward, she met someone else and moved away (into another private rental). They plan to marry and now have another child (2 weeks old now). My ex son in law took redundancy from the army and pocketed over £70k, of which my daughter was entitled to zero for now (she will get part of his pension pot when he reaches his retirement date). She has had such a raw deal, that we want to help them onto the property market. Our plan was to sell our property and put the funds towards a house for themselves (we would have a solicitor draw something up in case they split). As I said above, our mobile home is not some little tin tent, but a luxurious home with all the facilities we could wish for. I believe in helping my family, and want to give my daughter, her partner and our four grandchildren a 'leg up'. The other reason for selling our property is basically because there is nothing for us where we live. We live 3 hours away from my daughter and her family, and to keep the house on when we retire would be madness, as we'd be at the van all the time. We don't want to rent... long story .. too many horror stories... so there's a little more background ... sorry if I've gone on a bit !!!!

kidmugsy

barnsleynanna wrote: »

I believe in helping my family, and want to give my daughter, her partner and our four grandchildren a 'leg up'. ... We live 3 hours away from my daughter and her family,... sorry if I've gone on a bit !!!!

Aye, but it's not your goodness of heart that we doubt. Can't you somehow combine it with a bit of hard-headedness?

barnsleynanna

I can kidmugsy, and I appreciate your concern. The above posts have certainly given us pause for thought.... I thank you !

RickyC_IFSWP

barnsleynanna wrote: »

Have thought about some of the points above and would add the following information, which may go some way toward explaining our train of thought. Yes, hubby is 10 years older than me ... I'll be nearly 55 when he retires and I'll continue to work as a self employed proof reader. This provides an income of around £200 per month, which is enough to pay for the caravan site fees. Electricity is extremely cheap at the van site, and gas is also reasonably price. Hence, the only outgoings we would have would be our car and caravan insurance. Regarding gifting the money to our daughter ... a little history. She was an army wife for many years, travelling all over the place. Her army husband treated her (suffice it to say), extremely badly and she had no option but to leave. Since she was abroad at the time, she wanted to return to the UK, but the local council told her that since she had made herself 'voluntarily homeless', they would not house her. She and my three grandchildren came to live with us and eventually privately rented. Some time afterward, she met someone else and moved away (into another private rental). They plan to marry and now have another child (2 weeks old now). My ex son in law took redundancy from the army and pocketed over £70k, of which my daughter was entitled to zero for now (she will get part of his pension pot when he reaches his retirement date). She has had such a raw deal, that we want to help them onto the property market. Our plan was to sell our property and put the funds towards a house for themselves (we would have a solicitor draw something up in case they split). As I said above, our mobile home is not some little tin tent, but a luxurious home with all the facilities we could wish for. I believe in helping my family, and want to give my daughter, her partner and our four grandchildren a 'leg up'. The other reason for selling our property is basically because there is nothing for us where we live. We live 3 hours away from my daughter and her family, and to keep the house on when we retire would be madness, as we'd be at the van all the time. We don't want to rent... long story .. too many horror stories... so there's a little more background ... sorry if I've gone on a bit !!!!

Well you sound very lovely and I'm sure your daughter and her fiance would be very appreciative of the gift. I can understand where you're coming from as family is important in my culture too.

There were just a few concerns mentioned.. so just be aware of them before making your final decisions. These relate to: the big income tax liability if you choose to take your whole pension pot in one go (as mentioned you could just take 25% tax-free and then take income as and when needed, but you'll need to review the invested funds); the potential inheritance tax liability for gifting the sale of the house (we don't know what your property is worth/how much you're giving away); the potential Pre-Owned Asset Tax on staying at the property your daughter will buy using your gifted money (albeit as mentioned this is unlikely to be an issue if the benefit is small).

Not sure if anyone else has anything else to add. All the best:)

barnsleynanna

Thank you Ricky..... the gift wouldn't be massive. We'd net around £80k from the house ....... not sure if that'll make a difference on the 'gifting' issue ?

Annisele

I'd also worry about how your daughter feels about this.

In exchange for the gift, she'd have to always own a house that's big enough for you to have a room for two months of each year. If she wants to move abroad, or needs to downsize for financial reasons, or she has to sell the house to pay off a now ex-partner, she'd be in a very difficult position (as might you, if she couldn't put you up for those two months each year).

RickyC_IFSWP

barnsleynanna wrote: »

Thank you Ricky..... the gift wouldn't be massive. We'd net around £80k from the house ....... not sure if that'll make a difference on the 'gifting' issue ?

Very unlikely as your estate would be below the £650k threshold (Mr & Mrs). It would be wise to make a note of when the gift was made and how much though in case you come into large windfalls and make further gifts. Who knows!

atush

I'm sure a lot think it's a 'bonkers' idea but a lot of cultures look after their families, and I intend to try to do the same .. my family are my life !

But what you are missing is that the Looking after is the other way round in those cultures, ie the younger looking after the older. Nothing wrong with giving the kids a leg up, i've put 3 thru university with no student loans and hope to help them further. But we wont until we are sure we have enough to live on as we don't want to come to them for handouts or place to live.

BUt you have not made sure you have sufficient funds for living, and this would include a separate place to stay for your 2 months a year and those costs. Leave bunking with the relatives for 2 weeks a year holiday/visit and spend the rest somewhere cheap (abroad maybe) so that needs to be funded.

Hence, the only outgoings we would have would be our car and caravan insurance.

you haven't planned for normal living costs/outgoings from food, to clothing, to mobile phones, to running a car etc.

As much as you say your mobile home is great for the disabled there are usually steps up to it, and they tend to be remote and you have to drive anywhere. If you are happy fine, but the other 2 months a year needs better planning. You will also need to fund a storage unit for all the essentials you need to keep form your former life- as mobile homes have poor storage as they aren't meant for 24/7 living

barnsleynanna

atush wrote: »

But what you are missing is that the Looking after is the other way round in those cultures, ie the younger looking after the older. Nothing wrong with giving the kids a leg up, i've put 3 thru university with no student loans and hope to help them further. But we wont until we are sure we have enough to live on as we don't want to come to them for handouts or place to live.

BUt you have not made sure you have sufficient funds for living, and this would include a separate place to stay for your 2 months a year and those costs. Leave bunking with the relatives for 2 weeks a year holiday/visit and spend the rest somewhere cheap (abroad maybe) so that needs to be funded.



you haven't planned for normal living costs/outgoings from food, to clothing, to mobile phones, to running a car etc.

As much as you say your mobile home is great for the disabled there are usually steps up to it, and they tend to be remote and you have to drive anywhere. If you are happy fine, but the other 2 months a year needs better planning. You will also need to fund a storage unit for all the essentials you need to keep form your former life- as mobile homes have poor storage as they aren't meant for 24/7 living

Atush, firstly, there are no 'steps up to it'... there is a large wrap around verandah with a ramp (we had this put in to accomodate my elderly parents). We aren't remote : the town centre is at most, a ten minute walk away. Mobile homes have excellent storage these days. We keep all of our 'caravan' clothes there all year, and any furniture from our current home would move to my daughter's new home if wanted - if not, we'd simply sell it! With regard to outgoings, we know we need to fund a car and food/clothing, and have planned for this. A lot of caravan sites these days are open 12 months of the year, and a lot of people live in them... have you looked at the newest mobile homes ? Ours has three bedrooms, fully equipped kitchen, dining area, en-suite bathroom, a wrap around verandah and terrace, and a large shed containing barbecues, extra freezer, washer, dryer etc.... you'd be surprised how well equipped they are for 24/7 living !