Looking for help with advice for my parents

Pipsqueak87

Cairnpapple said:

Regarding your dad's DC pension, he might benefit from a call with Pension Wise to talk through 

Thank you! I’ll get him booked in for that! 

Pipsqueak87

poseidon1 said:

Is the Airbnb property income derived from a separate dwelling from your parents home?  If so up until April 2025, the AirBnB income ( serviced lets) was treated as pensionable earned income, but I am guessing your parents may not have availed themselves of the opportunity to contribute to private pensions from that income source.

Going forward Airbnb has lost that beneficial earned income status and is now treated for tax purposes no differently than any other passive buy to let residential letting.

Given the ever increasing hostile legislative  environment for private landlords, what is the value of the Airbnb property ( assuming of course its not run from their own home)? 

 Depending on its value, and any capital gains tax that maybe payable on a potential sale, is there a potential benefit in their selling and reinvesting in more liquid accessible income producing assets?

It’s attached to their own home. It’s a little annexe built for my grandad that they are now using as an air bnb since he passed away around 10 years ago. I’m not sure if they did know about the pensionable earnings part, but if they did, they didn’t use any of it to contribute to their private pensions! 

Pipsqueak87

Marcon said:

Pipsqueak87 said:

Hello.

I hope I can get some input here on some advice to give my parents.

I left the UK at about 20, and I’ve been gone almost 15 years now, so I’m really not clued up on how pensions etc work over there as it never concerned me. 

Both of their children now live in far away countries and have their own children, so my parents need flight money to visit multiple times per year, which increases their yearly spend quite a lot. I want them to make good decisions with their money, but it almost seems too late to do anything meaningful to increase their financial position. They are looking to me for advice on how to best make use of the money, and what options to choose in order to maximise it. 

Any advice hugely appreciated and welcomed! 

Wouldn't the best idea be to suggest to your parents that they take some proper (paid for) financial advice from a professional? It makes little sense for them to rely on someone who, realistically, is in no position to do more than relay comments from random strangers on the internet, based on a few paragraphs of information.  

I agree with the other commenter in that they don’t really have the pension pot that would benefit from paying for professional help. If they had more put away for retirement then I would understand the benefit. But these are very small pots of money, I don’t think professional help would pay off. Hence why I’m trying to get free advice to steer them in the right direction! 

poseidon1

Pipsqueak87 said:

born_again said:

You mention AirBnB
Is that a separate property. Which will of course increase monthly expenses. Or part of their home, which again will increase insurance costs.

Yes it’s a little annexe attached to their home, so it might be the reason their insurance looks high! It’s up for renewal next month so I’ve strongly suggest they get a few quotes before they just renew.

In that case my comments in that regard do not apply.

 However, landlords cover will have increased their usual buildings and contents insurance spend. Hopefully they are aware of all the permitted running costs they are allowed to deduct from their rents for tax purposes, in running this side business.

Pipsqueak87

poseidon1 said:

Pipsqueak87 said:

born_again said:

You mention AirBnB
Is that a separate property. Which will of course increase monthly expenses. Or part of their home, which again will increase insurance costs.

Yes it’s a little annexe attached to their home, so it might be the reason their insurance looks high! It’s up for renewal next month so I’ve strongly suggest they get a few quotes before they just renew.

In that case my comments in that regard do not apply.

 However, landlords cover will have increased their usual buildings and contents insurance spend. Hopefully they are aware of all the permitted running costs they are allowed to deduct from their rents for tax purposes, in running this side business.

Thank you, I know they are writing off a few bits as business expenses, but I’m not sure if they’re claiming everything they could! I’ll look into that for them. 

Albermarle

Pipsqueak87 said:

Cairnpapple said:

Regarding your dad's DC pension, he might benefit from a call with Pension Wise to talk through 

Thank you! I’ll get him booked in for that! 

Make sure he has all the details of the pension to hand, when he speaks to them.
Note that they can not offer personalised advice, just general guidance of what options are available.