Retirement looming - Ready to sell up - Downsize or rent?

Sirlaughalot

Hi all,

Looking to retire by the end of the year! I`m single, have no dependents and have about £150000 after the sale of my house and a state pension to live off.
I'm a man of modest means and have no medical problems at the moment, so I would like 15 years of retirement. 10K per annum + pension + interest should be enough, I think. If not, I might do some part-time work.

So, the dilemma for me is whether to take less income and rent out and take the retirement figures stated above.

I'm keen on the rental option as the flexibility offers.

Has anyone had a similar dilemma? it would be great to hear your stories.

Bradden

It's not clear from your post where the £150k is currently? 

Take less income and rent out?  Are you considering selling your property to release the capital?

Sirlaughalot

Bradden said:

It's not clear from your post where the £150k is currently? 

Take less income and rent out?  Are you considering selling your property to release the capital?

Hi Bradden. When i have sold the house that's the equity I hope to have left.

gwynlas

The problem is that rental  comes with little security unless you obtain a social tenancy.

Certain HAs offer sheltered housing for those over pension age but there might also be high service charges.

With that amount of savings you would be outside the scope of any means tested benefits.

Sirlaughalot

gwynlas said:

The problem is that rental  comes with little security unless you obtain a social tenancy.

Certain HAs offer sheltered housing for those over pension age but there might also be high service charges.

With that amount of savings you would be outside the scope of any means tested benefits.

Thanks for that. I'm quite flexible really. i assume social tenacy is a contract?  Providing I'm not bonded to it long term that would not be a problem. Been in my present house now for over 26 years and it is far too big for me to look after in retirement and would hate to see it fall into disrepair. Best to sell it on to a young family who can have as much happiness in it as I have.
I must admit the thrill of being in a different property/area is quite appealing and Im open to a wide range of options in my retirement years

QrizB

I don't know where you live or how much you'd expect to pay in rent, but £150k could buy you about £7500 a year as an index-linked annuity, before income tax. £6000 a year after tax.

https://www.hl.co.uk/retirement/annuities/best-buy-rates

Would that cover your housing costs? That would leave you with the state pension for everything else. Or you end up eating into your pension to keep a roof over your head.

Sirlaughalot said:

I'm a man of modest means and have no medical problems at the moment, so I would like 15 years of retirement.

You're likely to live for at least 20 years after state pension age, so planning for 15 years will likely leave you short. Hence my suggestion of an RPI-linked lifetime annuity.

Sirlaughalot said:

Thanks for that. I'm quite flexible really. i assume social tenacy is a contract?

A social tenancy is (in general terms) what would previously have been called a council house. Provided at a reduced cost to hard-up folk.

[Deleted User]

Do you still have a mortgage to pay off with the sale of your house? You say the house is quite large but will will only have £150000 after it is sold? Do you have any other other pension provision or savings? How far are you away from state pension age?
You say you want to be be 'flexible' but with increasing age a secure place to live and enough money to live comfortably may well become more of a priority.
What are you earning now to keep you?

Stubod

I would never consider selling a house and renting in retirement!!....While there is more legislation comming out to protect tenants, you will never have any real security if the landlord decides they want to sell. And every year your rent will be going up. (How would you feel about being forced to  ove in your 80's if the landlord decides they want their property back?).

I would do some spreadsheet calculations to show your llplanned income v expenditure as rent will form the majority of your monthly outgoings, (depending on what your rental expectations are), and could well take the bulk of your state pension??

Sirlaughalot

QrizB said:

I don't know where you live or how much you'd expect to pay in rent, but £150k could buy you about £7500 a year as an index-linked annuity, before income tax. £6000 a year after tax.

https://www.hl.co.uk/retirement/annuities/best-buy-rates

Would that cover your housing costs? That would leave you with the state pension for everything else. Or you end up eating into your pension to keep a roof over your head.

Sirlaughalot said:

I'm a man of modest means and have no medical problems at the moment, so I would like 15 years of retirement.

You're likely to live for at least 20 years after state pension age, so planning for 15 years will likely leave you short. Hence my suggestion of an RPI-linked lifetime annuity.

Sirlaughalot said:

Thanks for that. I'm quite flexible really. i assume social tenacy is a contract?

A social tenancy is (in general terms) what would previously have been called a council house. Provided at a reduced cost to hard-up folk.

Can i put the £150K from the sale of my house into an indexed linked annuity? I assumed annuities were for pensions

QrizB

Sirlaughalot said:

Can i put the £150K from the sale of my house into an indexed linked annuity? I assumed annuities were for pensions

Yes, as a Purchased Life Annuity.

See for example:

https://www.canadalife.co.uk/retirement/purchased-life-annuity/

Sirlaughalot

QrizB said:

Sirlaughalot said:

Can i put the £150K from the sale of my house into an indexed linked annuity? I assumed annuities were for pensions

Yes, as a Purchased Life Annuity.

See for example:

https://www.canadalife.co.uk/retirement/purchased-life-annuity/

Thanks. I never knew that. Are these incomes tax-free and what would happen when I'm dead and gone.