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Need a plan

fluffymuffy
fluffymuffy Posts: 3,424 Forumite
Part of the Furniture 1,000 Posts Photogenic Combo Breaker
I'm 60 and in poor health, with no pension other than the state pension at 67, which I might not reach. My spouse has no pension other than the state pension which they will start to receive in the next couple of years. We live with our disabled grown up child, who is not able to live independently but didn't qualify for PIP (because they can dress themself and walk 200m). I have applied for PIP because my disability makes it impossible to work. I expect to be refused. My spouse earns about £15k from self employment. We used to get Working Tax Credit but now that's ended, and we don't qualify for Universal Credit because I inherited £40k from a parent. We are living frugally trying to make it last. We recently took out life insurance for spouse in case they die before my retirement age. 

Aside from that we just sold our house for nearly £500k. We had no idea it was that valuable. We have to find a new place to move to. Should we buy somewhere very cheap and put the extra money in a pension/anuity/fund? Perhaps with a bigger house we could rent out a spare room? Any suggestions appreciated.


I am the Cat who walks alone
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  • Marcon
    Marcon Posts: 12,975 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper Combo Breaker
    I'm 60 and in poor health, with no pension other than the state pension at 67, which I might not reach. My spouse has no pension other than the state pension which they will start to receive in the next couple of years. We live with our disabled grown up child, who is not able to live independently but didn't qualify for PIP (because they can dress themself and walk 200m). I have applied for PIP because my disability makes it impossible to work. I expect to be refused. My spouse earns about £15k from self employment. We used to get Working Tax Credit but now that's ended, and we don't qualify for Universal Credit because I inherited £40k from a parent. We are living frugally trying to make it last. We recently took out life insurance for spouse in case they die before my retirement age. 

    Aside from that we just sold our house for nearly £500k. We had no idea it was that valuable. We have to find a new place to move to. Should we buy somewhere very cheap and put the extra money in a pension/anuity/fund? Perhaps with a bigger house we could rent out a spare room? Any suggestions appreciated.


    If you've not yet done so, is it worth exploring further whether you are actually getting all the benefits to which you and your adult child are entitled? 

    Have you taken out the 'right sort' of life insurance - ie term life, which will end when you reach retirement age? Anything else could be an expensive waste of money.

    What was the plan when you decided to sell your house? Presumably completion looms so you'll need to take some fast decisions about where to go next. Do you want to rent out a room and have a stranger living with you? If not, that closes down that route. Are there any 'very cheap' properties in your area, in a part of town where you'd feel comfortable living?

    It's very hard to make any sensible suggestions when your post gives so little information about what is viable/important to you.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • Interesting post. It really reads like this: sorry to hear, terrible place to be in, sorry to hear, we've just sold the house for £500k  :open_mouth:

    As it already happened what's the plan then? In theory you would earn about £25k a year from interests alone - so depending on your needs, lifestyle, location this could be enough to cover your rent and possibly life needs.
    You could buy a small size flat and live with the rest of money quite comfortably.

    More info needed..
  • 2nd_time_buyer
    2nd_time_buyer Posts: 784 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    edited 14 November 2023 pm30 1:06PM
    Renting out a room can be quite tax efficient as the first £7500 of income is tax free. However, sharing your house is not for everyone and finding the right person, particularly in your circumstances, might be tricky and could be a massive headache if you don't get the right person - I know from experience.

    In terms of de-risking things for your wife, then buying the cheapest property that will meets your need (in terms of space and location) and buying an index linked annuity (in your wife names) is an option. I guess you want to provide for you child in the future - that would at least leave a property to pass on.


  • Have you taken out the 'right sort' of life insurance - ie term life, which will end when you reach retirement age? Anything else could be an expensive waste of money.

    What was the plan when you decided to sell your house? Presumably completion looms so you'll need to take some fast decisions about where to go next. Do you want to rent out a room and have a stranger living with you? If not, that closes down that route. Are there any 'very cheap' properties in your area, in a part of town where you'd feel comfortable living?

    Yes, we've checked what we could claim for 'child'. They are autistic without intellectual disability. Needing support but not in the correct way to score enough points in the PIP assessment. 

    We got decreasing term insurance - £200k decreasing at 8% for 8 years. Costing £54 a month for a fit and healthy 65 year old. The insurance company sent a nurse round to check.

    The plan to sell the house was because it is in need of repairs which we cannot afford. Seemed best to sell before it deteriorates further. We're looking for somewhere within walking distance of a shop - we currently live miles from nowhere and I cannot drive, nor can my offspring. 

    If we have £100k left over after buying a house what's best to do? Half each in a pension?  Would we have to limit pension payments to the max of our annual income? It wouldn't have much time to grow but we would gain some tax advantage. I don't know much about these things. Also, my illness is a brain problem (injury) which affects my thinking.
    I am the Cat who walks alone
  • Interesting post. It really reads like this: sorry to hear, terrible place to be in, sorry to hear, we've just sold the house for £500k  :open_mouth:

    As it already happened what's the plan then? In theory you would earn about £25k a year from interests alone - so depending on your needs, lifestyle, location this could be enough to cover your rent and possibly life needs.
    You could buy a small size flat and live with the rest of money quite comfortably.

    More info needed..
    Yes ☺ I know.  We were living our best lives with the little we had, and living in rented, when OH inherited the house, some years ago. It didn't come with cash so we've been fighting fires ever since. Very nice here but we can't afford to stay.

    We need three bedrooms plus somewhere for OH to work. We have another child who has only just left home and they are very young. I will keep a room for them in case they want to come back.


    I am the Cat who walks alone
  • xylophone
    xylophone Posts: 45,426 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Have both you and your husband obtained state pension forecasts?

    https://www.gov.uk/check-state-pension

    Presumably your disabled son is eligible for some benefits if he cannot work?

    Have you investigated what cheaper properties are available in your area?
  • Renting out a room can be quite tax efficient as the first £7500 of income is tax free. However, sharing your house is not for everyone and finding the right person, particularly in your circumstances, might be tricky and could be a massive headache if you don't get the right person - I know from experience.

    In terms of de-risking things for your wife, then buying the cheapest property that will meets your need (in terms of space and location) and buying an index linked annuity (in your wife names) is an option. I guess you want to provide for you child in the future - that would at least leave a property to pass on.
    Sorry you had a bad experience. My younger child just moved to a room in a family home in an expensive city, as a lodger. The family are getting a good lodger because 'child' is honest, kind, quiet and polite. If we found someone like that it could work. 

    Index-linked annuity sounds like a thing to look into. Thank you.
    I am the Cat who walks alone
  • 2nd_time_buyer
    2nd_time_buyer Posts: 784 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    edited 14 November 2023 pm30 2:07PM
    If we have £100k left over after buying a house what's best to do? Half each in a pension?  Would we have to limit pension payments to the max of our annual income? It wouldn't have much time to grow but we would gain some tax advantage. I don't know much about these things. Also, my illness is a brain problem (injury) which affects my thinking.
    I think this might be the crux of it. If your wife just has a state pension, then £100k is unlikely to provide an income much above "essential" even for a single person household (i.e. not including dependents):

    https://www.which.co.uk/money/pensions-and-retirement/planning-your-retirement/how-much-will-you-need-to-retire-aNmlv7V7sVe9

    If you/she had £200k it would give a lot more wiggle room.

    Your idea of renting out a room is sound. However, you might want to consider how sustainable it is going forward - say for instance in 10 years time.  
  • xylophone said:
    Have both you and your husband obtained state pension forecasts?

    https://www.gov.uk/check-state-pension

    Presumably your disabled son is eligible for some benefits if he cannot work?

    Have you investigated what cheaper properties are available in your area?
    We will both get the maximum - £203.85 / week - which is more than we've ever earned. 

    Benefits don't pay out on the basis of being unable to work. The PIP form has a rigid list of tasks which score points for needing help with. Many patient advocacy orgs are challenging the nonsense under the #FixPIPnow banner. E.g. Parkinson's UK
    I am the Cat who walks alone
  • Marcon
    Marcon Posts: 12,975 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper Combo Breaker
    Interesting post. It really reads like this: sorry to hear, terrible place to be in, sorry to hear, we've just sold the house for £500k  :open_mouth:

    As it already happened what's the plan then? In theory you would earn about £25k a year from interests alone - so depending on your needs, lifestyle, location this could be enough to cover your rent and possibly life needs.
    You could buy a small size flat and live with the rest of money quite comfortably.

    More info needed..
    Yes ☺ I know.  We were living our best lives with the little we had, and living in rented, when OH inherited the house, some years ago. It didn't come with cash so we've been fighting fires ever since. Very nice here but we can't afford to stay.

    We need three bedrooms plus somewhere for OH to work. We have another child who has only just left home and they are very young. I will keep a room for them in case they want to come back.


    You need 3 bedrooms in case a child who has just left home wants to come back...are you sure you have enough spare cash to give you the luxury of doing that, especially if the offspring doesn't come back? It's an entirely understandable parental reaction, but it is going to come at a price you may not be able to afford.




    If we have £100k left over after buying a house what's best to do? Half each in a pension?  Would we have to limit pension payments to the max of our annual income? It wouldn't have much time to grow but we would gain some tax advantage. I don't know much about these things. Also, my illness is a brain problem (injury) which affects my thinking.
    Your pension contributions are generally limited to your gross annual earned income. Unfortunately, for technical reasons, you can't use something called 'carry back' (which would increase that limit).
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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