Frivolous, ageing parent - financial advice

Fledgling40 · 11 November 2017 at 12:51PM

Hi, hoping I can get some advice.

My mum is around 10 years away from retirement and has no formal plans, savings or substantial pension.

What she does have is about 4 years of a pension, a pot of money from downsizing mortgage free (it’s prob less than £50k) and no job atm due to relocation.

From her perspective she’s more affluent than she’s ever been and whilst being out of work she’s getting very spendy. Every time I see her there’s a new item in her house or that she’s wearing, or waiting for delivery of.

She’s not worried due to the cash sat in her bank, but she could easily live another 30 years. And there’s no contingency for illness, or anything else that could happen.

I’m really worried about her. I’d like her to get IFE but a quick look online I get quotes of £500 fees. She can be very shortsighted/tight and doesn’t seem to understand what benefits and peace of mind she’ll get from getting advice. She just seems to think so long as she can cover the bills she’ll be fine.

Am I missing any support I can direct her too?

pip895 · 11 November 2017 at 1:04PM

Do you mean IFA? Most unfortunately wont be interested for only a50k pot.

xylophone · 11 November 2017 at 1:22PM

Has she obtained a new state pension statement?

https://www.gov.uk/check-state-pension

If so, what does it say?

Is she looking for another job? If so, she'll almost certainly have a pension scheme that she can join.

What kind of pension is the "4 year pension"?

Fledgling40 · 11 November 2017 at 1:45PM

Thanks for the replies. She’s looking, yes but has mentioned part time. Shes always been under the national average salary.

I’ll get her to check her state pension and no, I don’t know what her private one is, but she won’t have had much to pay in as she had a mortgage until very recently.

I’ll be honest, I don’t have a great amount of knowledge myself. So maybe the IFA is the wrong service. I’d just like her to get some financial advice on how and what she needs to do to best provide for her future.

AnotherJoe · 11 November 2017 at 2:32PM

1. Ask her when she plans to retire, and work out if she'll be able to cope on SP.
2. Point out the free money she can get, by saving into a pension now (Once she starts working) and paying much less tax when she withdraws it. eg if she saves £800 now, that will be bumped up to £1,000, when she withdraws that she might end up paying about £100 tax or less so that's a free £100 at least.
3. Point out that she can still get free money now even if not working, if she pays £2,880 into a pension the government will kindly make that up to £3,600.

bigadaj · 11 November 2017 at 5:16PM

Fledgling40 wrote: »

Thanks for the replies. She’s looking, yes but has mentioned part time. Shes always been under the national average salary.

I’ll get her to check her state pension and no, I don’t know what her private one is, but she won’t have had much to pay in as she had a mortgage until very recently.

I’ll be honest, I don’t have a great amount of knowledge myself. So maybe the IFA is the wrong service. I’d just like her to get some financial advice on how and what she needs to do to best provide for her future.

It's difficult to get advice on smaller sums, sites like this are useful for many.

Direct her to read up on here, there's the money advice service as well, but her situation could be worse as much advice is for those heavily in debt which she doesn't appear to be.

Maybe explain to her how little she really has by dividing the money she has by 30, and check the pension situation for the future.

Direct her to this site but you might need to be careful given the title you've made for this thread.

kidmugsy · 11 November 2017 at 5:32PM

Fledgling40 wrote: »

She’s not worried due to the cash sat in her bank, but she could easily live another 30 years.

About 50% of women her age will live longer than that.

Argghhh · 11 November 2017 at 7:35PM

make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them

Silvertabby · 11 November 2017 at 7:45PM

make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them

Not so. She owns a mortgage free property.

Fledgling40 · 11 November 2017 at 8:28PM

Thanks all, so the consensus is there’s no professional/private body who can advise her or help her map out a retirement plan? I’ve been searching and found SOLLA, but not sure if they’re reputable.

greatkingrat · 11 November 2017 at 8:46PM

Argghhh wrote: »

make sure she has a funeral plan in place, after that it is only her living costs she has to worry about, any debts she accumulates will be written off if there is no money in her estate to pay them

I would say that is the last thing to worry about! No point putting money aside for a funeral if you don't have enough to live on in retirement in the first place.

As she owns her own property, there is always the option of equity release at some point in the future to supplement whatever pensions she has.

Frivolous, ageing parent - financial advice

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