Can wife's pension be transferred upon death?

dutchism1958

Jamesd,

I have thoroughly read your response and have a few questions to ask which I'll come to in a minute.

The maximum for the class 3A purchase is £25 per week,given my wife's age of 80 that equates to £13,600 which is fine.I will contact DWP to confirm how much of this is inheritable.

1.P2P-I am a complete novice but keen to learn,so would it be best to start with the forum for P2P,to build knowledge and then dip my toe for experience with a small amount?,appreciating your comments to spread the load over a minimum of 4 P2P lending firms.

2.You mention equity release from our home as an option, do you mean home reversion schemes or via an equity release lifetime mortgage?.Which is preferable if we went down that route?.

3.Spending money at a level appropriate to at least £32,000 a year-sorry to be thick but what is the reasoning behind this jamesd?(I assume it is to draw capital to reduce the cost of care without huge capital loss?).We probably already spend this if we include our holidays and had thought of replacing our car too.

I suppose point 3(reducing possible future care costs) ties in with your final point of "spending now while we both have the chance to benefit looks likely to be the best move,to improve quality of life".
We do quite well to be honest,and whilst we watch our money we do spend it on holidays,good food,wine etc.

If we are honest, my wife has just been assessed for dementia etc and came through with flying colours,it is far more likely,in the consultants opinion that she will die from another stroke or heart attack than needing care for dementia etc. But who knows??.

My gut feeling is to go for P2P.I hope I have understood you correctly,feel free to put me right!.
G.

jamesd

I'll split this over several replies. P2P first.


Ablrate initially, there are currently 23 loans available there on the secondary market. That's where you are buying from other lenders at a price they offer. There are decent enough yields - interest rates - available on all 23 at the moment. So I suggest that each of you opens an account and looks to buy £100 worth of each of those loans each day until you reach a little under the maximum you want at Ablrate for the moment. £100 per day is to get you better buying prices, it gives a chance for a new seller to come in and keep the price lower as you buy. At potentially £4,600 between you each day you should get the money invested fast enough and it gives you time to learn while you get started.

At MoneyThing, put maybe £5,000 in each of your accounts and look on the secondary market between about 11PM and 8AM. There is a time overnight when MoneyThing stops processing new payments into accounts so you can quite often find things that others just don't have money to buy at that time. It will take quite a while to spread your money around all loans here because many are almost never offered for sale. Try eventually to get a fairly even split between each borrower. All loans beginning with AE are one borrower, one I think is quite good, so maybe accept more there than you would like initially then sell some and reinvest over time. Here all secondary market prices are fixed at the original loan offer price.

Both also offer new loans and of course they should be used as well but this will be slower than using the secondary markets initially.

At both places most loans pay their interest on the same day of the month as the day of the month when the loan ends but there are a few exceptions. Most loans are interest only until the end of the loan term but there are a few at Ablrate that are amortising, meaning some capital and interest paid off each month, just like a personal loan or repayment mortgage.

Please note that I invest in these places so there is a chance that you would buy from me. If you act as I suggested that chance is fairly low because I usually try not to have the cheapest price at Ablrate and tend not to be selling when I suggested you buy at MoneyThing.

jamesd

For equity release I wasn't thinking of home reversion. Instead, there are now some equity release lifetime mortgage products that let you draw money gradually and which let you choose to pay the interest if you like. Both of those features lower the total potential amount of interest that accumulates.

jamesd

£32,000 was a fairly cautious number for spending level that wouldn't end up spending capital. If you want to spend more than that let me know and I'll estimate what can be taken while planning to use the capital up gradually. Something like £50,000 to £60,000 while you are both alive then dropping to something over £36,000 after her death is the likely sort of level.

Depends a lot on how long it is assumed that she may live because the plan needs to allow for paying the money as long as that. The biggest challenge is the years until your pensions start. Once those are being paid you'll have a generous combined income from all of the pensions. So to a large extent her life expectancy isn't the limiting factor, it's those eight years.

Ignoring her known medical conditions, a healthy 80 year old woman has a life expectancy of 91 and:

1 in 4 chance of reaching 95
1 in 10 chance of reaching 99
Chance of reaching 100 8.7%

Her known health issues mean that lower levels are likely but these numbers still give some useful ages to plan around.

I don't actually know her current state pension income so knowing that would be useful.

It's somewhat ironic but one of the challenges of retirement income is for people to spend all they could spend that would improve their quality of life. Takes quite a mental shift to switch from "saving for retirement" to "I have enough, now my task is to spend it to make my life better". To the extent that spending can do that, of course, there's more to life than spending. You've collectively done a good job of preparing for now, so you can relax a bit.

dutchism1958

Thanks for your reply Jamesd,very informative.

My wife's state pension is £6319.As I am a non tax payer I have allocated her my share of the marriage allowance also.

Trying to get my head around spending(unless it's for investing) is indeed going to be challenging but I understand why now.£50,000 to £60,000 would be only used if we decided to replace the car in one year.

The biggest hurdle is probably going to be P2P for me-not doing it but understanding what I'm doing and why.It's the old case of taking the plunge!.I have read so many cases on here of people(who are far more savvy than me) disappointed with returns they have received on P2P investing etc.I feel the best bet would be to open accounts for both of us with Ablrate and Moneything initially,get to know the set up,read on the P2P forum for understanding and start investing soon after.
Do you recommend starting with these two initially to gain experience then expand further to 1-2 others to spread the load etc?.

Thank you again for your time and patience!
G

jamesd

Yes, those two are good to get started.

Some offer less good deals and more restrictions, that's part of why I recommend those two as being good places for newcomers. Decent deals, easy enough to get money out quite quickly at no cost and not too hard to get money in. Just right for experimenting and learning because it's easy to change your mind.

bigadaj

jamesd wrote: »

Yes, those two are good to get started.

Some offer less good deals and more restrictions, that's part of why I recommend those two as being good places for newcomers. Decent deals, easy enough to get money out quite quickly at no cost and not too hard to get money in. Just right for experimenting and learning because it's easy to change your mind.

Not sure I'd be keen on many others currently.

dutchism1958

Thank you jamesd. Over to me now to start the ball rolling.
Just a thought,my wife pays basic rate tax,I pay 0% as a non earner/carer.What is the tax status with P2P and does it count towards my savings allowances?.

and to say to you a very big "thank you" on both of our behalfs for the time,patience and effort you have put in to help us understand the options open to us given our situation.
G&S.

Trentenders

P2P earnings count towards your savings allowance.

dutchism1958

Thanks for the confirmation Trentenders.