How can a widow boost her pension?

Mrs_pbradley936

Hello,

I am after some advice for a widow that is a home owner with a house worth  around £350K. Since her husband died she is without his State pension. Her own State pension is tiny because she was working in days when she did not pay a full stamp. She does have a pension of her own from when she used to work for Norwich Union which now Aviva of about £500 a month.

She has around £30K in savings and is looking for a way to boost her monthly income.

We are exploring equity release and/or reverse mortgage. As in if it feasible to do equity release and then get an annuity. 

Does anyone have any other suggestions? I said about getting a lodger but she is not keen on that.

 

lisyloo

Downsizing to a smaller property

Part time job

can you give us a clue how old she is?

if she really wants to stay where she is, doesn’t want a lodger or to work then equity realease is an option.
did her husband have a private pension “pot” that had any funds left in it?
I presume his pension did not provide for her after his death.

tacpot12

I think you have covered all the possibilities, unless she might be able to do some work. 

She won't qualify for Pension Credit because of her pension income, but if an error has been made in respect of her own state pension she might get a little more. Have a careful read of this article: Women who paid ‘married women’s stamp’ could be owed thousands in basic state pension - AroundTown Magazine

Having a lodger could be a good option for herr, especially if she lives somewhere where rents are very expensive. Having a young lad or anyone with a child probably won't work, but a person of the same age, and with similar interests and needs could be mutually beneficial.

Equity release is the classic answer to being Asset Rich and Cash Poor. 

Misslayed

You could help her check her outgoings are as low as possible- has she got the single person occupancy discount off her council tax? Has she got a water meter? If she has a mobile phone there are SIM only deals for less than £10. 

Mrs_pbradley936

Thank you everyone. She is 76 and cannot really downsize because in a 2 bed house so downsizing means a flat and by the time she pays everything and adds in £90 per month service charges (she has looked into it) she will be no better off.

So assuming she uses her house for more money, is it better to get a lump sum and buy an annuity or get a reverse mortgage? How much would an annuity which gives her £500 a month cost? Are these linked to inflation? I mean suppose she is still here when she is 90, £500  a month won't look as good.

Marcon

Mrs_pbradley936 said:

Thank you everyone. She is 76 and cannot really downsize because in a 2 bed house so downsizing means a flat and by the time she pays everything and adds in £90 per month service charges (she has looked into it) she will be no better off.

So assuming she uses her house for more money, is it better to get a lump sum and buy an annuity or get a reverse mortgage? How much would an annuity which gives her £500 a month cost? Are these linked to inflation? I mean suppose she is still here when she is 90, £500  a month won't look as good.

She needs proper advice based on a full understanding of all her circumstances, health, attitude to risk etc. There is a limit to how useful a site like this can be, simply because people don't have the essential information.

xylophone

Is this lady sure that she cannot  improve her state pension on her husband's contributions?

When did her husband reach SPA?

https://forums.moneysavingexpert.com/discussion/comment/80571959/#Comment_80571959

Green_hopeful

Lodgers are great. She could get someone lovely. I had some great ones and she could get £7500 tax free. Makes a real difference. She would have to pay a bit more council tax but other than that it’s free. If she got a student it would not be more on council tax. 

Lorian

xylophone said:

When did her husband reach SPA?

And when did he pass away?

lisyloo

She needs proper advice on equity release but it's certainly an option at 76.

Downsizing could also mean moving to a cheaper area not just a smaller home.
Sometimes people do this to be closer to family & friends.

Mrs_pbradley936

Thanks everyone, lots to think about.