Advice on reducing savings in retirement

GrumpyOldMan_2

Is it possible to give grandchildren gifts of money to reduce my savings so that I would fall below the £6000 exemption that most state benefits set.

e.g. say I have £20K, could I gift 5 grandchildren (all under 18) £3000 (£15K total) leaving me with savings of £5000.

Would the DWP / Local Council try to say that I have disposed of my savings in order to qualify for Pension Credit/Housing Benefit,etc?

Any thoughts or experiences would be appreciated.

seven-day-weekend

I think you can give away as much as you like.

If after having given your money away you applied for means-tested benefits, then your bank accounts would be scrutinised (as they are with everyone who applies for such benefits), they would want to know where the money had gone and if it was decided that you had deliberately deprived yourself of capital in order to receive these benefits, then you would be treated as though you still had the money and would not get the benefits. It is also considered to be fraud.

Why would you want to make yourself dependent on means-tested benefits anyway? Don't you want a bit of choice in your life?

GrumpyOldMan_2

Well I wanted to leave some money to the Grandchildren - however - it would appear that this is not possible and I will have to use the small amount of capital I have to supplement my income until it falls below the lower threshold.

Just seems a little unfair that having been careful with money all my working life and put a little asside, I now am not free to use it as I would like to.

Still that's life!

seven-day-weekend

OK, Grumpy Old Man, I understand why you would want to leave your money to your Grandchildren (I'm a Grumpy Old Woman myself, although I don't as yet have grandchildren), but think about it.

If you are on means-tested bensfits, you have to jump through hoops to get them, you have to tell the powers that be all your financial business, you are always beholden to someone for your income.

However...use your OWN money that you have worked for, and you do not have to answer to anyone, jump through any hoops, or show anyone your bank book. You can have some fun!

I'm sure your grandchildren would want you to enjoy what you had worked for, rather than live on benefits that you have to answer to the State for.

Hope this helps.

margaretclare

I totally agree with 7DWE on this one, and although it's a fairly common idea, it's a mystery to me why anyone would want to reduce their assets just so that they can go on to means-tested benefits.

No one is saying you can't leave money to your grandchildren or to give them money as and when you choose to, when they need it and can appreciate it. Have a look on the Silver Savers board for a thread headed 'Calling all SKI-ers' and you'll see what some of us are doing.

A phrase that I see very often which is beginning to grate on me, this business about 'having worked hard all my life....' Well, we've all done that. My second husband and I have over a century in the workplace between us, mostly in responsible jobs, so no one can say we haven't 'paid our dues to society' - paid taxes and NI for many many years! What we have now, we intend to enjoy first and foremost, and if there's anything left, the grandchildren (3 of mine and 2 of his) can have it. But there is no way I intend to do without to bring myself into the means-tested category.

Would the DWP / Local Council try to say that I have disposed of my savings in order to qualify for Pension Credit/Housing Benefit,etc?

Yes, probably they would. And why would you want to? What are grandchildren under 18 going to do with that sort of money? It's not as if they're old enough to buy a house, go to university, anything like that.

Incidentally, we're still saving - we both max out our cash ISA allowances each year, just because we don't know what we may want or need in years to come.

Margaret

PS: In your first post you talk about 'giving' money away to grandchildren to reduce the amount of your savings. In your next, you change that to 'leave them' money. Giving and leaving are really two different things, and you need to be clear in your mind what you really want to do and why.