AIBU for sacking off pension contributions in anticipation of large inheritance?

if Labour are in power for a few years they will be coming after your inheritance.

Every government will be

To answer one question that keeps popping up:, I have never and will never ask my parents for money or gifts. Yes, if I were that wealthy I’d be more generous with my own children both financially and in terms of gifting/holidays/meals out etc, but I think mine are just quite tight frugal and focused purely on grandchildren rather than children which is their call and amazing for our children. So no I won’t be asking them for holidays or to pay into my pension however nice that would be.

It's a bit weird to watch you struggle imo but at least the dc are sorted.

It's defo sensible to keep saving though.

Hello, OP -

My parents are older than yours and already live in a lovely, (expensive) retirement community offering the option to step up to assisted living. Their finances and our expectations are broadly similar.

We have a family spreadsheet of their expenses and these are daunting, even though my parents essentially live a pleasant, middle or upper middle class life. But so what? My parents have been through a lot, they made every euro through honest hard work, and they deserve whatever comforts their money can bring them.

I am lucky to feel that our future is secure anyway, but we live as if this inheritance may never come to pass. I cannot imagine doing anything else.

You could, but I personally think it's not a great position to be in, relying on people dying for your financial planning. Emotionally that just feels wrong.

I may inherit money from my Mum and my OH from his parents but we have not built that into the financial plan, partly because you can't rely on it (although I agree than given the numbers you are talking about it's very likely you'll get a significant inheritance) but also because we don't want to feel like we are 'waiting' for them to die.

I wouldn’t op, if Labour are in power for a few years they will be coming after your inheritance.

That’s a big risk you’re taking! You can’t guarantee what happens to any of the money you’re hoping to get, but you can guarantee a miserable retirement if you only have a state pension to live on

Maybe you need to look at the pension projections if you were to pay in an extra 5% or whatever you want and see if you think it's worth it. It may not be worth the bother for the amount you'll get back or it may be a really good investment.

From your figures the chances are you are correct and you will have a sizeable inheritance , but one of your parents may live into their late 90s , as both my DM and MIL are . This means , by depending on that money , you have no option to retire early as you could be late 60s before you receive your inheritance.

Imagine my surprise when on her death there was a newer will that was 2 years old leaving her entire estate to my sister and cutting out us 5.

I would never want money over the relationships with my siblings, I have no idea how people can be so immoral.

Lots of things could impact in that. Care homes being more than you think, house price crashes, your parents deciding to leave it to the cats home, the law on inheritance tax could change

I have no idea if this is possible, but can your parents pay into a pension for you?

Keep saving hard into your pension.

Should your parents be very long lived (all my family make it past 95) It will give you the opportunity to retire earlier than receiving inheritance.

And is savings and very cost effective savings at that.

And it is as well to have a buffer to retire earlier and enjoy early retirement at full tilt as to ‘fritter’ your luxuries now, IME.

Also, being self sufficient is good for confidence, morale, contentment, and will forfend wishing your parents’ lives away.

I am not saying you are doing that now, but you might veer into it if you hit your 60s with chronic conditions and hate every day you have to drag your aching bones into work!

How much have you factored in for care home fees?

My FIL was in a home for 9 years, my Mum has been in hers for 5.5 years and my Dad for just over a year so far. All with dementia (and dementia care homes tend to be especially expensive). So fees can swallow up a huge amount. Their estates were substantial although not as large as your parents’, but I’m assuming I won’t inherit much.

I was one of the executors of my Mothers will. It divided her estate equally between her 6 children. Imagine my surprise when on her death there was a newer will that was 2 years old leaving her entire estate to my sister and cutting out us 5. She was compos mentis, spoke to solicitors. As there were 6 of us it was only going to be about 40k each. DH was also a cut out due to favourite child syndrome as his Father left everything to his sister. My friends Dad in his late 80’s has a girlfriend now, friend is worrying he will leave a chunk to her.

Anyway nothing is certain. DH and I always made decent contributions. He chucked in loads of additional payments in his last few years of work.

it’s still only about 12.5% of people over 85 that even use care homes it’s not the given for every older person.

what is likely to charge is costs for care in the home as that what the majority need. Currently house value doesn't get included, I see that changing.

Personally if you’re having these conversations already with your parents, why don’t they gift you a holiday each year and you save extra into the pension? That way they can see you enjoying the benefits of their wealth now, and (with the usual caveats) it’s more tax efficient?

Agree that it makes more sense for your parents to pass on some of their wealth now.

Also some economist think house prices will be somewhat depressed as the boomer generation die off as there is a glut of expensive family homes on the market plus fewer people want larger homes due to smaller families and utility costs.

If your parents estate is like 10m then you will likely get something but why haven't they helped you out already.

I think it's crazy to bank on an inheritance in 20 yrs time & I say that as someone who has parents and in-laws with houses worth ££££. The gov will need to tap into that money as the county is broke!

How can you have a true idea of what future care costs will be?

I would never rely on someone else to fund my retirement so no, I would keep paying whatever I could into my pension. Anything else is a bonus and I will use it to either have a more luxurious retirement or give the kids a house deposit.

Do check that, of course.

we’re putting in about £1,500pa

That's very low for an annual amount (and I'm also self employed, and I know how difficult it is without any employer contribution). What occurs to me is whether the parents would be prepared to contribute to your pensions, as a regular sum out of income. Regular support of a family member shouldn't fall foul of inheritance tax.

I work as a Nurse and have patients that are now 104 so there could be another 20 odd years.

Make your own provision