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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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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:

cleaty · 27/10/2015 13:39

mintbiscuit - If saving for a pension means you will only have a tiny annual pension of a few thousand pounds, it is better not to save for it. All that will mean is you will not qualify for any top ups, and may well be worse off.

mintbiscuit · 27/10/2015 14:20

cleaty - but even if you do save you are not forced to convert your pension pot into a guaranteed income/annuity which agreed, would only amount to a tiny annual income. For small pots you can withdraw the whole lot in cash up to 30k. And depending on when you withdraw this you can save paying more tax than you need to. But people need to take advice/guidance on what options they have and how they impact them financially.

I still stand by my initial post that pensions are more attractive than they once were due to all the changes. Granted they may not be for everyone and that is why people need advice and guidance going forward.

Disclaimer: the above post does not constitute financial advice.

cleaty · 27/10/2015 14:33

I am in a final salary scheme. I can't withdraw my pot. I will have a very small pension as I have a low wage.

mintbiscuit · 27/10/2015 15:06

Cleaty not sure what scheme you are in but you can transfer out of your DB scheme to a DC scheme under new rules. If the transfer value is less than 30k (i think!) I believe you don't need to take financial advice to do so. Anything above I think you do. Giving up a guaranteed income isn't for everyone but some people may need access to a cash lump sum so better for some people.

cleaty · 27/10/2015 15:16

I am pretty sure I can't transfer.

PinkSparklyPussyCat · 27/10/2015 15:27

It's all very well to say downsize but it's not always possible. When my Dad died my Mum struggled to afford the house (only a 2 bedroom semi, nothing flash) but didn't want to leave her home as downsizing would have meant moving to either a rough area or a small property where she couldn't take her animals. She ended up doing an equity release (not the sort where interest is due) which wasn't ideal but at least it meant she could stay where she was happy.

Out2pasture · 27/10/2015 15:32

OP, depending on her age your mom could reverse mortgage her home, freeing up money for ongoing maintence. Another option is to sell it now to the person who will inherit it, have them pay for maintence. Passing it on to family now would not affect a care home application ( in Canada anyway).

suzannecaravaggio · 27/10/2015 15:36

an equity release (not the sort where interest is due

the interest rolls up into the loan such that if you borrow £20k against the house it turns into £100k over about 20 years

then again if you cant downsize it's the only way to release the capital in your propery

expatinscotland · 27/10/2015 15:39

Oh, goody! Another well disguised council house haters thread.

PeteCampbellsRecedingHairline · 27/10/2015 15:40

What would you choose if you had to put money in a pension or save for a deposit? I can't afford both, houses here cost a fortune but wages aren't great.

cleaty · 27/10/2015 15:41

My parents rent a council house. They continue to pay rent every month. They pay much more than it would cost to maintain their small house.

PeteCampbellsRecedingHairline · 27/10/2015 15:41

Oops sorry! Was meant to start my own thread.

PinkSparklyPussyCat · 27/10/2015 15:43

DM released a set amount (I can't remember how much as I wasn't involved) and the company will get half the value of her house when it has to be sold. There is no interest accruing as such (they will never get more than half of what the house sells for) and as it stands the company are making a nice profit as house prices have gone up so much.

She's always felt guilty as she wanted to leave me the house but I'm really not worried, I'd rather she was comfortable and happy now. The only downside is that if she goes into a care home she will only have half the value of the house to fund it.

ilovechristmas123 · 27/10/2015 18:39

im in my 40's and am mortgage free (3bed 230k) but i have no pension

im also disabled with 3dc's

my plan is to sell when they have all grown up,buy a 1 or 2 bed flat/house for £130 150k tops and live of the money left and then the goverment will have to step in

i still feel very lucky that i have a choice as to where i live,what sought of place i can choose etc

even though i have no pension i still feel more fortunate than those that rent be that LHA or private

ilovechristmas123 · 27/10/2015 18:46

also the age of retirement keeps going up,which means later and later to be classed as a pensioner so far the better benefits the pensioner gets now will be further out of reach for this generation

i really do think many more people will die before pension age in the future as the pension age keeps increasing,there is no way a pensioner in 20yrs time is going to get the protection they get now

Badders123 · 27/10/2015 18:49

My mum (70) bought her council house after my dad died.
(I don't agree with rtb but it wasn't my money or decision)
She can sell it in 4 years - which I hope she does and then rents a smaller HA bungalow.
She can then live off the equity and can pay for her own care should she need it.
She gets a pittance of a state pension and a small company pension from my late dad.
She has worked since she was 15. Had to give up due to ill health at 60. My dad died 6 months before retirement.
She is lonely, frail and has to be frugal.
I can't imagine anyone being envious of my mum tbh.

Scoobydoo8 · 28/10/2015 06:38

The OP's DM is not paying rent so in theory would be paying say 4,800 a year in rent.

But what she saves would most likely be less than the cost of repairs.

Is the OP taking that into consideration.

whooshbangprettycolours · 31/10/2015 20:36

There is a misunderstanding about the NEW state pension. Once this comes in there will be no top ups on benefits, the means testing stops. What you save will be above the state pension, but if you don't you will be living in penury.

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