parents buying while on state pension

theartfullodger

Sunday Times says Suffolk building society now does loans of up to 40 years for anyone, regardless of age.

....

meeemee

Looking at your previous questions would you be using the £25k plus you have saved from your benefits to help your parents pay for this discounted house? Only leaving a smaller amount for your siblings to contribute, without a mortgage? 

SavingPennies_2

alisonnpaul said:

ThisIsWeird said:

Your parents are ~78, and you don't anticipate they'll need care for 15+ years? 

That would be great, but when they do need a care home, how will it be financed? If they own a property, it'll be (should be) from that. Does that affect your plan? 

I would anticipate questions being asked when your folks get to the "where did the money to buy this property come from" stage. Whether the council will also ask these Qs, I don't know, but they'd be remiss not to; I doubt this is the first time elderly tenants with a good RtB discount and zero bank balance suddenly found themselves with the 'means' to do so.

If they somehow manage to find a way of buying this discounted house and then pass it on to their children, then that would, I understand, be considered a 'deprivation of assets'. Ie, they would have had the means of paying for part of their own care when the time came, but they intentionally disposed of it, expecting the 'state' to pay for their care instead, for the sole purpose of their offspring having a nest egg at the expense of the tax payer - and the latter group will include most of the folk on here from whom you are seeking advice on how to do this.

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

they have both worked during there life and paid there taxes so feel they are entitled to the RTB 4 siblings would fund on there behalf repairs would also be the responsibility of the siblings. agreeably 20 yrs is a bit excessive with 88 yrs of age being a more accurate figure care would also be our private responsibility my main concern is if 4 siblings deposit 10k each into our parents account will it affect there benefit even if it was only for a week or two while the sale was arranged 
agreed it would create a large financial gain on death but they have paid a lot in tax and done there time 

But they have already benefited - from a lifetime of subsidised and secure housing and maintenance, in which they were able to raise 4 children I might add. Many, many people work hard and pay a lifetime of taxes and never get that "luxury". You seem to think they are owed something back, when in fact they have had that and more already.

Anyway, this doesn't answer your question which I think others have confirmed that yes it is possible, though in my opinion it should not be.

Skiddaw1

Worth also pointing out that whilst State Pension isn't means tested, Pension Credit (if they recieve any) is... and yes, the capital would potentially affect it.

theartfullodger

Presume they are already getting the OAP's 6 usual benefits - 'bus pass, state pension, free eye tests, winter fuel allowance, free prescription, £10 Xmas bonus?

Norman_Castle

Keep_pedalling said:

theartfullodger said:

I got a mortgage when in my 60s a few years ago, running until my age 80.

Speak to a few brokers....

Who pays for the discount please?

We pay for the discount through our council tax. 

Nobody pays for the discount. The sale of the property is a loss of an asset from a councils housing stock. A councils housing stock has to by law be self financing with an independent account, The Housing Revenue Account. By law this cannot be financed by or finance other council spending. The sale proceeds are mostly returned to central government with a small proportion being returned to the council. 

I'm not supporting or defending the RTB, just pointing out it and council housing is not financed through council tax payments.

Norman_Castle

alisonnpaul said:

SavingPennies_2 said:

ThisIsWeird said:

[Some text cut]

Does that sum up what this thread is about; how to get a cheap house for which you have no entitlement, by manipulating a system which was never intended for this purpose, and for which the tax payer will pay the balance?

Is this an ethical move? 

From previous posts the OP seems quite comfortable and adept at making the most of the benefits system.

this does sum it up both my parents have worked hard and paid their taxes we would fund the costs between 4 of us at no costs to our parents and do any future caring between 4 of us if needed sell up and relocate to a bungalow 

How do you feel this would benefit your parents?

Brie

Don't do it as it's not worth the effort.

You and your siblings could lend the money needed to your folks thus allowing them to buy.  And your parents could pay a token amount back to you in an "interest only" way perhaps.  They would retain a liability of you loaning them and you would get very little more than your money back when the house is eventually sold (as it most certainly will be).  Oh and who's paying the solicitor btw?

You and your siblings seem to think that caring for elderly is easy (it's not) and that you will all do an equal share of this (highly unlikely).  So what if a one sibling lives too far away or has a lot of work/family commitments?  Or loses their job and has no money to fund that needed boiler or whatever?  Are you prepared to fall out with your siblings??

And what about the local authority providing care either in this home or in a care facility?  As long as one of them is living there then the house won't be sold but as soon as neither lives there the house will be sold and the council will get the majority (either by reclaiming the discount or by buying it back at a discount.)  If this means that there's more than £23k in savings (each for each I believe) your folks will be paying for their own care.  Once it drops below then the council will pick up the tab.  And assuming they don't both die at the same moment there will likely be one of them who then ends up with the ripe total of £23k in the bank when they eventually clock out.   Don't forget that a cheap care home will cost them each at least £1k a week so the money will go quickly.

So you give them your savings and pay all the expenses and get diddly in return until they both die.  At which point you are likely to get the princely sum of £23k to be split 4 ways between you and your siblings.  As opposed to £16k split 4 ways that you might get currently.  So my calculations tell me that you are going to go through a lot of stuff, expense out of your own pocket (can't claim expenses as your not landlords) and you're going to profit by the grand total of £1750 each. 

So much effort, so little profit.  Don't do it.

MalMonroe

Keep_pedalling said:

theartfullodger said:

I got a mortgage when in my 60s a few years ago, running until my age 80.

Speak to a few brokers....

Who pays for the discount please?

We pay for the discount through our council tax. 

Oh please, let's not start going down that route.

SavingPennies_2

Brie said:

Don't do it as it's not worth the effort.

You and your siblings could lend the money needed to your folks thus allowing them to buy.  And your parents could pay a token amount back to you in an "interest only" way perhaps.  They would retain a liability of you loaning them and you would get very little more than your money back when the house is eventually sold (as it most certainly will be).  Oh and who's paying the solicitor btw?

You and your siblings seem to think that caring for elderly is easy (it's not) and that you will all do an equal share of this (highly unlikely).  So what if a one sibling lives too far away or has a lot of work/family commitments?  Or loses their job and has no money to fund that needed boiler or whatever?  Are you prepared to fall out with your siblings??

And what about the local authority providing care either in this home or in a care facility?  As long as one of them is living there then the house won't be sold but as soon as neither lives there the house will be sold and the council will get the majority (either by reclaiming the discount or by buying it back at a discount.)  If this means that there's more than £23k in savings (each for each I believe) your folks will be paying for their own care.  Once it drops below then the council will pick up the tab.  And assuming they don't both die at the same moment there will likely be one of them who then ends up with the ripe total of £23k in the bank when they eventually clock out.   Don't forget that a cheap care home will cost them each at least £1k a week so the money will go quickly.

So you give them your savings and pay all the expenses and get diddly in return until they both die.  At which point you are likely to get the princely sum of £23k to be split 4 ways between you and your siblings.  As opposed to £16k split 4 ways that you might get currently.  So my calculations tell me that you are going to go through a lot of stuff, expense out of your own pocket (can't claim expenses as your not landlords) and you're going to profit by the grand total of £1750 each. 

So much effort, so little profit.  Don't do it.

A well reasoned argument here, remember we're taking about a 100k house in South Tyneside (the prices aren't going to rocket like they might have elsewhere) not a million pound house where you might (might!) get a life changing inheritance. It's going to be what, 80k "profit" split 4 ways, much less if care home fees kick in or maintenance is needed. So even from a selfish perspective it might not be worth it for you. Let your parents have the security of their home in their old age and then let someone else benefit as they, and indeed you, have when they pass on.