Helping a parent retire with no pension

FluffyCygnets

I don’t know if this is the right place to post this...

I’m looking for some ideas around helping a parent, with no private pension and no real savings, to retire. She has a house worth about 450K, but it’s very small so it would be hard to downsize and I don’t want her to have to move to a different area because I’m worried she will be isolated. My partner and I have a house worth about 625K with a mortgage of 300K. I’m trying to think creatively about what we can do to release some money in my mum’s house, short of her selling up moving in with us!

Any thoughts on areas to investigate would be very welcome

Skibunny40

What age is she? When does she get her state pension?

AnotherJoe

Could she move to a flat ? Would that be cheaper enough to make it worthwhile?

GDB2222

There's always equity release (ie borrowing a shedload of money).

xylophone

I’m looking for some ideas around helping a parent, with no private pension and no real savings, to retire.

How old is your mother?

There was no provision for her in any spouse pension?

Are you sure that she has no private pension provision at all?

https://www.gov.uk/find-pension-contact-details

FluffyCygnets

She can get her state pension in May. After bills she really won’t have enough to live a nice life. She’s given up so much for us, her kids, that I want to make sure she enjoys her retirement and can travel and have hobbies. I don’t want her to eek out an existence.

She’s nervous to move to a flat because of service charges and unexpected bills for maintenance. She would also like a small outdoor personal space.

I live about an hour and a half away, but houses aren’t much cheaper here, so she could move nearby but wouldn’t get any equity out of her current house. We’ve thought about pooling resources, buying somewhere with a bigger garden and building a ‘granny flat’, but I wondered if anyone had a better idea about how we could move money around. I can take on a bit more debt if necessary.

FluffyCygnets

I don’t think there’s any spouse pension allowance - she’s been divorced for a long time, I’m not sure we can go there...

FluffyCygnets

Yes, we had a look at equity release - I really thought that would be the way to go but discovered she would lose her entire house to the interest quite quickly.

GDB2222

Supposing she needs another £10k a year to live on, that will need around £300k in capital to provide. When you say "I can take on a bit more debt if necessary", what sort of figure do you have in mind?

Why not start off by saying how much extra income you think your mum will need?

FluffyCygnets

Thanks, that’s a very sensible suggestion and exactly why I’ve come here for help! I’m not good at this stuff. So, I think she would need at least £200 a month extra.

I could just give her the money, but I think she would be unhappy about that, and it seems like it would be better for her to be able to use the money in her house, as it’s pointless once she’s gone. It might be that the only thing for her to do is move, but I wanted to see if there’s anything we’re missing. Some crazy ideas - we could buy a second property with a deposit from the sale of her house, so we free up some equity for her, and she rents it from us for £0, but the mortgage would have to be small. Or could we remortgage her house and take it on ourselves? But we’re paying interest on these options so that doesn’t seem sensible.

Skibunny40

If you can comfortably afford to give her £200pm, then I think you can put some sort of charge against her house that is recorded in her will, or repaid if/when she sells her house for whatever reason... however that depends if you can definitely afford it - you'd need to consider what would happen if your circumstances change. Worth a chat with a IFA?