Renting with equity from house sale

davel265

Hi

Wondered if anyone out there has any advice regarding moving an elderly parent to a rental property.

My Mum lives in a house that her and my Dad took an equity release mortgage out on about 10 years ago. The house is currently on the market as we need her to move to live closer to me (I do quite a bit of running around for her and she is in receipt of attendance allowance). Once the house sells and the existing mortgage has been paid off she will be left with around £50K.

I'm trying to work out the best way to get her a new home but appreciate that as she won't be able to get a mortgage we will probably end up renting. My main concern is that because she has converted her home into cash the money sat in her account will affect the benefits she receives, even though its to be used to pay the rental for as long as possible.

I understand that shared ownership might be an option which would put the money back into the house, but would appreciate the advice anyone can give as I'm really struggling to find any interest from independant financial advisors!

Regards
Dave

Mojisola

The capital won't affect her State Pension and it won't change the amount of Attendance Allowance she gets.

Is she getting anything else?

rtho782

Why should someone with £50k in the bank be supported by the state (i.e. me)?

Yes, it will affect her benefits, if she gets any means tested ones, but once she runs out of money if she is renting she can claim housing benefit.

AnotherJoe

rtho782 wrote: »

Why should someone with £50k in the bank be supported by the state (i.e. me)?

Because in the bigger scheme of things it discourages people from saving for their old age "what's the point of saving for a pension when Old Mrs Hubbard across the road lives in a lovely flat on housing benefit paid for by me out of my taxes and I'll have to live in dump?"

davel265

Thanks for your replies.