Pensioner frugality- not spending !

MEL1981

Wondering if anyone has been in a similar situation. I have an elderly relative in their mid 70's and still fully mobile and owning their home (lives alone) who has a large lump sum of approx 200k in a cash ISA. 

They spend little, and live off the state pension shopping in lidl and charity shops. We tell them to enjoy the money as it will either go to nursing homes or children but they have a mindset not to spend! A mindset built up over their lives of being frugal and not having much money.

What advice would you give them? Has anyone else been in a similar position?

MEL

Isthisforreal99

Maybe it's you that needs the advice of "let them be" instead of pestering them?

Highly unlikely you will change a deeply ingrained mindset but maybe they are happy in what they are doing.

artyboy

I think I started a similar thread some time back with exactly the same situation, other than the number, which was more like £750k, and rising every year. No children. No partner.

They had a level of awareness of the fact that they were going to end up dying and giving a big chunk up in IHT, which they definitely didn't want to do, but couldn't get out of the frugal mindset, nor come up with a divestment strategy to friends, family, or charity.

Despite the fact that I was being very explicitly asked for guidance and suggestions by this person, the general tenor of responses on here was to 'butt out' and that I was somehow trying to exert undue influence. So I basically gave up.

Full disclosure, I'm very likely the one that administering this (currently intestate) mess of an estate will fall upon and I really don't want the hassle, any more than I care about any of the money. I just want them to make some bloody decisions. And maybe even a will. Some hope of that...

ouraggie

My thoughts , in no particular order:
1. Just because you have money does not automatically mean you must spend it. Ok, that’s the default for most people but not everyone operates acc to the default.
2. There are many people who can afford to not shop at Lidl and in charity shops, yet they still do so. I guess the mindset is that they absolutely cannot see any sense in paying £30 for a new jumper if the charity shop has one they like for £5, and in addition the money is going to a good cause.  Similarly, why pay £3 for butter when you can buy one just as good in Lidl for almost half that, and in addition you can browse the middle of Lidl while you are in there.
3. Their money may go to the nursing home or the children, but it may also go to charity, or to the cat, or to wherever else they decide.
4. When you have been short of money it is difficult to become a spender when this is not the case any more. Compare this to somebody who is, say, agoraphobic. They are not able to eg go into town on the bus. Long before that stage they need to start by perhaps just walking out to the front gate and back.

The advice i would give them is ”Do what makes you happy, not what others say you should do.; but also don’t go without or deny yourself something that you want if you can afford it. You are only here once so live the best life you can. You are worth it.

Baldytyke88

I am single and in my early 60s, so I too don't care too much for holidays and going out. I am learning to spend my money, someone in their 70s has left it way too late.

I enjoy doing stuff locally, but if I had a large pension I would try and spend it. If he is around other people, he may be more likely to spend, at least I would.

BridgetTheCat

Yeah I have something similar with my parents. Dad in particular grew up very poor but ended up with a good career and good pension. 10 years ago they still pinched every penny but now in their 80s they’re beginning to spend especially on private healthcare since that’s about their quality of life and they can’t afford to wait a year or two (!) for treatment on the NHS.

Marcon

MEL1981 said:

Wondering if anyone has been in a similar situation. I have an elderly relative in their mid 70's and still fully mobile and owning their home (lives alone) who has a large lump sum of approx 200k in a cash ISA. 

They spend little, and live off the state pension shopping in lidl and charity shops. We tell them to enjoy the money as it will either go to nursing homes or children but they have a mindset not to spend! A mindset built up over their lives of being frugal and not having much money.

What advice would you give them? Has anyone else been in a similar position?

MEL

If they are happy why do you think they need advice?

Reddleman79

I have a retired mate who likes to travel places on the bus. He has a lot more money than me, but always goes for his long journeys on a Saturday because he won't pay to get a bus before 9.30 on a weekday. He always takes sandwiches because he won't go to cafes. 

I take a different attitude. I bought myself a new motorbike last year, and enjoy eating out regularly and enjoying decent wine and cheese. I like to make sure I spend as much as I receive in pensions. As long as I have my premium bonds and ISA, I'm  happy.

Keep_pedalling

I find your comment on the money going nursing home interesting, but look at it from the other way round. Having that cash when you are in need of support could turn out to be wise choice. There could you4 it to okay for the best care available, they could even use it to pay for a live in carer to keep them out of a care home and stay put in their own home. We have certainly ring-fenced some of our savings to enable us to do that if nessesary. 

bjorn_toby_wilde

Marcon said:

MEL1981 said:

Wondering if anyone has been in a similar situation. I have an elderly relative in their mid 70's and still fully mobile and owning their home (lives alone) who has a large lump sum of approx 200k in a cash ISA. 

They spend little, and live off the state pension shopping in lidl and charity shops. We tell them to enjoy the money as it will either go to nursing homes or children but they have a mindset not to spend! A mindset built up over their lives of being frugal and not having much money.

What advice would you give them? Has anyone else been in a similar position?

MEL

If they are happy why do you think they need advice?

If they are then I’d agree, but often they aren’t. My parents aren’t quite as bad as some but they still deny themselves basic things that they enjoy and can easily afford, whilst adding to their savings every month. Waiting two months to buy a favourite food because it’s not on offer.  The saving? 60p!  Bonkers.

My friend’s father turns the heating down and wears two sweaters despite having enough in the bank to trigger a sizeable IHT bill.  That’s not my definition of happy.

Marcon

bjorn_toby_wilde said:

Marcon said:

MEL1981 said:

Wondering if anyone has been in a similar situation. I have an elderly relative in their mid 70's and still fully mobile and owning their home (lives alone) who has a large lump sum of approx 200k in a cash ISA. 

They spend little, and live off the state pension shopping in lidl and charity shops. We tell them to enjoy the money as it will either go to nursing homes or children but they have a mindset not to spend! A mindset built up over their lives of being frugal and not having much money.

What advice would you give them? Has anyone else been in a similar position?

MEL

If they are happy why do you think they need advice?

If they are then I’d agree, but often they aren’t. My parents aren’t quite as bad as some but they still deny themselves basic things that they enjoy and can easily afford, whilst adding to their savings every month. Waiting two months to buy a favourite food because it’s not on offer.  The saving? 60p!  Bonkers.

My friend’s father turns the heating down and wears two sweaters despite having enough in the bank to trigger a sizeable IHT bill.  That’s not my definition of happy.

... but it might be theirs....