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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think many people would be better off not buying a house or saving for a pension

68 replies

Shazziedazzie · 27/10/2015 07:05

My DM worked very hard to buy her own house and saved for many decades for a pension. Now she's retired its a real struggle to maintain her house, its like a money pit and costs 100s or 1000s each year to replace things. I've had to loan her the money for roof replacements. As she saved just a bit, she doesn't get any pension credits and is only a few pounds a week better off vs pension credits. So she should of just never bothered to save for a pension!

He neighbours next door never bought the house, she has it all maintained by the council and is even having a new kitchen fitted soon. The HB still covers all of the rent even though she has two spare rooms as she is retired. My DM is significantly worse off because she bought the house.

Aibu to just give up saving for a pension and just spend my house deposit money? Looks like a pension is only worth it if you can save a lot.

OP posts:
HeadDreamer · 27/10/2015 08:21

YANBU. For this generation of elderly, they can rely on the state to provide. MIL lives on pension credits, housing benefits and survives pretty well. Her attitude is exactly that you shouldn't bother to save.

For your mum, she can't afford to maintain the house. She needs to downsize or go into rental.

HeadDreamer · 27/10/2015 08:22

Once she's in private rental, and has less then a certain amount of money, she can go on the council house waiting list.

VulcanWoman · 27/10/2015 08:29

There might be a shortage of smaller properties with the council/housing associations but not smaller properties to buy.

suzannecaravaggio · 27/10/2015 08:36

No one can predict the future

TheStripyGruffalo · 27/10/2015 08:39

I took out a policy when my DS was small which would help to pay for university, because I've got that I can't get council tax benefit or other financial help but, because of the type of policy, I can't withdraw the money - only he could do that when he turned 18. I'd have been better off if I hadn't saved it up as he'd have got help with the fees due to our low earnings and we'd have got benefits that we really needed.

ShebaShimmyShake · 27/10/2015 08:40

Assuming she's still in a family home, why doesn't she downsize? Older people occupying family homes when they are either single or live only as a couple is one reason for the shortage of family homes for people who actually have children living with them, or would like to have them.

RhodaBull · 27/10/2015 08:41

This will all end. It has to.

I know someone who has never worked (he is in 30s) and his philosophy is that you must never officially own anything. He has a really nice flat in a very nice place paid with HB, no savings, and has part-done several degrees so that he keeps qualifying for more courses. He says the trick is never to finish anything. Now he is boasting that his ds will get a bursary to a top school because on paper he and his gf have nothing.

fakenamefornow · 27/10/2015 08:41

Also it takes what...25 years to pay off a mortgage? So after that you'll be living rent/mortgage free you are likely to be working for much of that time without having to fork out £500+ a month.

BrandNewAndImproved · 27/10/2015 08:45

I live in a council flat. In January I will be able to bid for a 3 bed house which will take a couple of years. Once my dc have left home and I'm 55 I will then bid and downsize to an elderly bungalow.

I couldn't afford to keep up a house or even my flat. When my boiler broke they put another one in, when my windows were crap they installed new ones ect ect.

I don't have to worry about roofs leaking, guttering, gas checks, heating not working, boilers, electrics, structural ect ect.

whooshbangprettycolours · 27/10/2015 08:46

Pension rules change come April and pensions and benefits will not cross over in the same way. More fool anyone not saving.

shebird · 27/10/2015 08:47

It depends where you live with regards to housing costs and buying v renting. For me to rent a house in the area I live would cost twice my mortgage payments.

justgoandgetalife · 27/10/2015 08:52

Ahem - I have f-all pension, as I made a stupid choice not to save enough in one & all my savings went keeping our family afloat when DH was unemployed for two years. We couldn't claim benefits as our assets were worth too much & we sold them all to stay where we are.

We are still catching up another two years later & have no choice when retirement comes, but to downsize, but hell, that was our choice & we are very lucky to have equity in our house so we can sell if we need to.

Once the kids are independent (which won't be for a while yet), we won't need so much space & I can't wait to have a good old clear out & dump all the accumulated shit.

She needs to swallow her pride & downsize. Sorry to be so blunt, but that seems pretty clear to me.

colourdilemma · 27/10/2015 08:58

Dh and I have a very large mortgage, larger than we can comfortably afford. Our lifestyle, whilst not hand to mouth, is nothing like our friends. But I would still rather have the house. We arent brilliant savers beyond pension and we would definitely have not had much money in the bank if we weren't paying our mortgage.When we finally pay it off, we can look at how things are then. If council care is still possible, we could decide to sell the house and go on world tours and then present as penniless. Or, as is looking more likely, we could be grateful to have something to sell to pay for our care. And if we were really lucky, leave something to our kids.
Now, I would like to say that was our plan; actually we just wanted a home and were a bit greedy with what we bought. But I think that it's still a good plan, even if it ends up just paying for comfortable enough care.

mintbiscuit · 27/10/2015 09:06

Pension rules change come April and pensions and benefits will not cross over in the same way. More fool anyone not saving.

Agree with whoosh. Pensions are going to become more attractive savings vehicles with the removal of compulsory annuitisation and auto-enrolment/employer contributions. After a late start I'm taking full advantage of my company pension. I will be getting a pittance in terms of state pension/benefits when I retire so will be looking at using my pension pot to pay off mortgage and reinvest for income.

PreciousxBane · 27/10/2015 09:13

In the row of eight 1920's large semis that my house is in four have one person living in them. Two are pensioners and two are still working but getting close to retirement. Personally as much as I love my house I would hate to be rattling around in it on my tod in the future and would be downsizing.

My Mother downsized and she also relocated, I have also relocated and more than once. I think sentimental types struggle to move house or area even if its financially a good idea.

cleaty · 27/10/2015 09:14

Yes to the saving for a pension. If they start means testing the pension, I will be one of them. My pension that I will have been paying into for 40 years by the time I retire, will be worth having if I also get the state pension. If I don't, I would have been better off just spending my pension contributions on having fun.

MrsDeVere · 27/10/2015 09:28

This reply has been deleted

Message withdrawn at poster's request.

echt · 27/10/2015 10:06

After a late start I'm taking full advantage of my company pension. I will be getting a pittance in terms of state pension/benefits when I retire so will be looking at using my pension pot to pay off mortgage and reinvest for income

Good luck with that.

Look what happened in the 90s, with companies electing not to contribute to their employees' pensions while the employees dutifully did so.

www.theguardian.com/money/2004/jul/10/pensions.jobsandmoney

This could never ever happen again.

TheHouseOnTheLane · 27/10/2015 10:13

Nicole me too!

cleaty · 27/10/2015 10:19

Pensions are a gamble.

suzannecaravaggio · 27/10/2015 10:57

Everything is a gamble
But the odds vary

mintbiscuit · 27/10/2015 12:00

*Look what happened in the 90s, with companies electing not to contribute to their employees' pensions while the employees dutifully did so.

www.theguardian.com/money/2004/jul/10/pensions.jobsandmoney

This could never ever happen again.*

echt there is no doubt that some employers didn't do the right thing back in the day - but that doesn't mean that saving into a pension isn't a good thing today.

The point I was making in my original post is that the pension industry has gone through a massive amount of change. DB/final salary pension schemes are almost a thing of the past in the private sector. New legislation will require all employers to have a pension scheme in place and to auto-enrol those with qualifying earnings. They are legally required to contribute a % of earnings too. Why, as an employee, would you not take advantage of this 'free money'. Pensions are also one of the most tax efficient ways of saving - personal or through a workplace pension.

Pension providers are heavily regulated and any provider worth their salt will have strict governance around investments. There are all sorts of de-risking strategies involved to protect peoples pots as they mature over the years. Yes the value of your savings can go up as well as down, but you have to take the long term view - much like property.

Overlay the flexibility to withdraw your savings in cash (with a % tax free) at retirement or leave invested for further income, then I think pensions are one of the best ways to save for the long term. No one is forced to purchase annuities that give a sh!t income anymore. Annuities have definitely contributed to pensions being seen as a lesser return on investment.

What I think the government needs to do though is better communicate/educate people on pensions in light of these new changes. People can then make informed and confident decisions on how to save for their future.

Phew - that was a bit long!

PennyPants · 27/10/2015 13:06

Two bits of advice for my DC;

Pay into a pension/ISA/savings as soon as you start work
Buy a house asap

So imo yabu

HelenaDove · 27/10/2015 13:27

Having a new kitchen fitted in a rented property can be hell as these residents found out.

www.newsshopper.co.uk/news/bromley/8380677.ORPINGTON__Tenants_take_hostage_in_kitchen_renovation_war/