Helping a parent retire with no pension

FluffyCygnets

I can, but of course it impacts my savings and retirement, so that sounds like a good thing to explore, thanks! I will get some professional advice

xylophone

Could you tell your mother that you are making her an interest free loan?

You could set up a signed and dated ( and witnessed) agreement that you will lend her so much a month to be repaid when the house is sold?

Should your mother need residential care in the future, you would be repaid before the rest of the sale proceeds of the house were used for care.

Should your mother die, the estate would repay your loan before the rest of the estate was distributed.

GDB2222

£200 a month is not a fortune. If you can afford it, the obvious thing to do is keep it simple and have a standing order at the bank to send her £200 every month, despite your saying it would make her unhappy. All the other options you mentioned sound horrendously complicated for such a simple transaction.

If possible, could she find part-time work rather than retiring completely? I'm older than her and not retired. My father went on working until 79!

When she is older, equity release may make more sense. There's also home reversions, which may work better for her. See https://www.moneyadviceservice.org.uk/en/articles/equity-release

HTH

ViolaLass

FluffyCygnets wrote: »

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.

But it would allow her to access a lot of money now, when she needs it. She doesn't need it once she's dead.

Owain_Moneysaver

FluffyCygnets wrote: »

She has a house worth about 450K, but it’s very small so it would be hard to downsize

How small? Does she have a spare bedroom she could use for a lodger or AirBnB? (or could the lounge be used as a bedroom if there is separate access to the kitchen?)

Depends on the area of course but 5 nights AirBnB at £40 would bring in £200 (less expenses) and perhaps give her an interest and some social contact too.

System

You could buy a bit of her house each year for £2,400 if it made her feel better?

zagubov

Unless the securing the loan on the sale of the house could be interpreted as deprivation of assets, I'd say that's got a lot going for it.

The money will be to the benefit of the parent, and will after she has no further use for it be returnable to you and not any other claimant on the estate.

Moving into a shared house, or making her downsize and move closer to you both, sound impractical.

Frittering away her lifetime biggest financial investment to pay off an equity-release loan when you can give her an interest-free one instead seems like a financially more benign path to follow.

tacpot12

FluffyCygnets wrote: »

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.

She might lose the equity in the house, but she will never lose the house while she needs to live in it.

I looked into Equity Release for my parents, and thought the Legal and General Lifetime Mortgage product looked ok. Its terms and interest rates seemed fair enough given that the lender would have to wait an indeterminate amout of time to get their money back.

FluffyCygnets

She’s renting out her one spare room for some of the time at the moment, which is a big help and something she can do for the foreseeable future. She will continue working at least part time as well once she reaches retirement. I’ve been able to get an education and a good job thanks to her sacrifices, so I guess ultimately I’d like her to share in that, rather than to continue on the way she is now.

It sounds like me just giving her the money in whatever way is acceptable to her is the best option, as long as I do it in a way that means I get it back for my retirement.

BoxerfanUK

FluffyCygnets wrote: »

I’ve been able to get an education and a good job thanks to her sacrifices, so I guess ultimately I’d like her to share in that, rather than to continue on the way she is now.

What a kind caring and thoughtful daughter you are. I'm sure your mum is very proud of you