Concerned about MIL lack of pension

[CherryTTT]

I’m a long way off retiring (20 years or so), but a meeting with a financial planner just got me thinking about how much more I need to put away into my own pension pot. It’s a lot!

MIL stopped working 10 years ago at age 55. For no other reason than she no longer wanted to work for her boss. I think she thought she’s find another job, but was in quite an ageist (beauty) industry, so didn’t manage to get a new one.

She hasn’t had a mortgage since 1998 and has continued to buy expensive clothes, beauty treatments and go on lovely holidays throughout this time. There has been no change in her lifestyle at all since she stopped working. She is a busy social butterfly and has lots of friends and fun, which is great.

I didn’t really think much about it (as it was none of my business) until the past 3 years when DH and I have had to pay for her new boiler, new heating system, roof repairs etc. We had just handed over £8k for urgent works when she went on a £6k holiday 2 months later!

She recently started dropping hints about another big bill she has coming up and just before I was going to mention to DH that we should perhaps pay it for her, she started telling me about the holiday she wants to go on to Mexico in November!

I’ve now told DH that we won’t be helping out financially again. We’ve got our own DC and house to support, as well as our our retirement planning and if someone can’t be frugal themselves, they shouldn’t be expecting handouts from others.

My main concern is about what happens when she is too frail to live alone or has frittered away whatever savings she has left. Her house is worth £300k. Nursing home fees in this area are £1000 a week, so with inflation, her house would cover 5 years of care at most.

What happens after that? Would she need to move from a private nursing home to a state one? I’m thinking what would happen if we couldn’t afford private school fees any longer, our DC would need to move to the local comprehensive.

Does anyone have experience of this?

PIL are a long long time divorced and FIL is still working. He’s made sure he’s got his own pension to support himself in own age. My own DP are self-employed and have private pensions, as well as business assets to rely on, so this issue is only concerning MIL.

I can't believe you were paying her costs for so long! Has DH agreed that it needs to stop?

Presumably she'll get state pension and perhaps pension credit? With a mortgage free home she'll be fine if somewhat straitened and needs to stop relying on you and save.

No idea about what will happen when's too frai.

Would she need to move from a private nursing home to a state one? Most are mixed intake and there is no difference in care.

She might not need to go into a home - has she done something daft like equity release ? How is she funding the last 10 years lifestyle? I'd need 20K a year minimum to keep up a mortgage free lifestyle with no dependents - where is the money coming from? In her shoes I'd down size radically if possible.

You have no financial obligation Would she need to move from a private nursing home to a state one? Most are mixed intake and there is no difference in care.

She might not need to go into a home - has she done something daft like equity release ? How is she funding the last 10 years lifestyle? I'd need 20-25K a year minimum to keep up a mortgage free lifestyle with no dependents - where is the money coming from? In her shoes I'd down size radically if possible.

You have no financial obligation - she would get a state pension and other associated benefits

This be the verse
web.cs.dal.ca/~johnston/poetry/theverse.html

hard to cut the parents loose, isn't it?

To be clear, she pays her own day to day costs from savings and I think state pension. We’ve only given her a one-off £8k 3 years ago. She also comes on holiday with us once or twice a year which we pay for and we pay for everything when she visits/stays.

In short, if she cannot care for herself and has chronic health issues at that time the local council will assess her and will provide care - either through continuing care (nhs funded) or through the councils own funding.

We had this very situation with my own mum this year. She was diagnosed with bowel cancer and also had Crohn’s disease and copd. She owned her home outright but had no income other than state pension and pension credit as she hadn’t worked for 20 years due to poor health.

The council assessed her and provided carers 3 times a day and when she couldn’t manage with that she was given a fully funded place in a nursing home under continuing healthcare. This later became hospice care and she died there. She never paid a penny towards her care, house was never touched.

Everyone seems to think you automatically have to sell your house or pay for care but that’s not always the case at all. It’s very much area dependent.

I don’t think she’s done equity release. I doubt it. It would probably make sense for her to sell her house at some point and rent a very nice small bungalow when she’s older and that would be £1200 or so a month. And she wouldn’t have stairs to worry about or maintenance issues to manage/pay for.

Thanks Myopinion. I didn’t know nursing homes were mixed entry. The one near us is quite fancy, so I think that one must be fully private. Either way, it wouldn’t be a long term option

In not saying by the way that that would be right in your situation, I’m just sharing my own experience.

If she's now 65, she will only have been receiving state pension for the last couple of years and if she's got a full NI record, this should be around £700 pm.

Working as a beautician for someone else doesn't sound like the kind of job where anyone earns much more than NMW + tips, so I wouldn't expect it to fund the lifestyle you describe, especially as she had no income between 55 and when her pension kicked in. You mention savings - did she previously have a higher paid job or her own business?

Could FIL be paying spousal maintenace. Lottery win? Otherwise, equity release looks like a possiblity.

I would definitely not give her any more money. On a pension with a mortgage free house, she should be able to manage, although obviously not to the level she likes. There's also the option of downsizing, which would have the double advantage of releasing funds to live on, plus lowering her bills especially if she chose somewhere with good insulation etc.

Once MIL is down to around £23k in savings the council would have to continue to pay for her care home fees.

DH needs to have a firm conversation with his mum to tell her that ‘bank of DS and DIL’ is closing.

If you don't think she's done equity release, where do you think she got her money from from age 55 to 63?

She could have easily spent £15-20k pa on basic bills, food, day to day travel, plus there's the expensive clothes, beauty treatments and holidays. Do you really think she had £100k+ of savings?

I would be less worried about care costs, as others have said, her house will pay for it until she's below the £23k limit and then the council will pick up the tab, it's more a case of how she's apparently maintaining her lifestyle on a basic state pension, which doesn't sound like it's the case. So either she's getting money from FIL, another source, has done equity release, or is in massive debt.

She wasn’t a beautician. She was a director within the beauty industry and well paid. DH left home 28 years ago, so she’s supported no one but herself since then. She really should have been saving more it seems

Do not give her another penny!!!

It's wasted money, basically. She needs to see a financial planner, think about equity release, and yes if she has made no provision the suggestions above are all workable. But you handing over sums is like throwing it into a black hole - it just slightly delays the point at which the state takes over and she tightens her belt, it doesn't change anything.

And the fact that she has the cheek to get you to pay for her repairs then blows thousands on a holiday makes me of the opinion that a. she's clearly financially incontinent and incompetent anyway so DO NOT throw good money after bad on her b. she's a slippery fucker so don't listen to any sob stories in future - tell her to use the bottomless holiday fund and c. if she can happily take from you like that then don't feel guilty, ever, about saying no!

@Fairylea the local authority fund care for medical conditions such as cancer but won’t cover the cost for dementia.

I think it's time for a sit down fully open conversation with MIL.

Do it on the basis that she is obviously struggling for money and you would like to help her by looking at a budget with her.

OK, if she was a director in the beauty industry perhaps she had her own private pension and/or signficicant savings? Or do you know she has no pension except the state pension?

In any case, I wouldn't be helping her out, it sounds like she has plenty of income, just more wants than it covers.

Everyone seems to think you automatically have to sell your house or pay for care but that’s not always the case at all. It’s very much area dependent. It's illness dependent. If your illness needs daily nursing care and decisions about treatment, it'll be funded. If it's untreatable, like dementia, and your needs are deemed to be "social care" - ie feeding and washing - then you are expected to pay for it yourself, including selling your house if you're not living in it.

Very few people get Continuing Healthcare funding, even if their needs require them to be in a nursing home, not a care home. That's why there is the expectation that you will need to sell your house.

If you are going to stop paying for stuff you need to let her know that the bank is now closed.
That way she has the chance to do better planning for herself.

Stop giving her money and stop worrying so much about her finances would be my advice.

Agree. Pre-empts the 'I can't afford the gas bill/boiler repair' because all her money's gone on holidays and clothes guilt trip.

As an aside it seems to wrong that this is illness dependant. No wonder that dementia tax was so unpopular. Maybe this weill aching in future. Who knows

OP does not sound a good plan to sell and rent for MIL as she might get benefits if needs be in her own home (owned) rather than having a lump sum. Don't think it is ever a good idea to see up to go into rented to be honest.

And stop enabling her spending.

Sounds as financially savvy as my MIL was. She went on a last minute 3 week luxury holiday to India with a friend as she really needed a break. Then when she came back she pleaded poverty and asked us for £2.5k to help fund her solicitors during her divorce. eh? it was a cost she was well aware of before her holiday was booked. I told dh we would essentially be funding her holiday so, even though she needed to sort out her divorce, the answer would be no from me.

The passive aggressive poor me attitude and trying to guilt trip dh was difficult for a long time but she reigned in her spending when she knew she didn't have a cash cow.

Thanks all. I don’t mind paying for her to come on holiday with us or the meals out when she’s staying with us (it would be nice if she’d offered once in a while). But we’re not paying any of the big one offs.

She just can’t keep up the same level of shopping, booking “bucket list” holidays and getting beauty treatments etc when she has no active income stream.

I’m going to suggest she sees the same financial planner I saw.

DH did reference about 6 months back about our expenses not going down once our DC have grown up. Something about care home fees (in reference to MIL), but I shot that down immediately. Not happening!

Why does your DH feel he needs to support her, maybe due to his dad not being around? If needs be you could help her with benefits such as pension and pension credit, maybe that would be wiser.

If she cannot afford maintenance/repairs to her house, she should look at downsizing and buying something cheaper and easy to maintain. I wouldn't be encouraging her to rent, that is just throwing money away, especially as she is currently mortgage free, just buy something cheaper and smaller and in good nick.