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.

Once she has burned through her savings she will just have to start living within her means. Meanwhile you and your DH need to stop the handouts.

I don't really see what's wrong with selling up to free up capital and then renting. Might be tricky if live v. long but really, who knows what will happen. That's what I intend to do when I'm older...maybe some sort of semi sheltered accom...something small and warm (current house old!)

If she's now 65 she won't have had her state pension for very long, not the two years mentioned upthread.

Well my DM is 65 and she's had her state pension for just under 2 years. It was a few days before her 64th birthday, so OK, it's 1 year 11.5 months ago according to the Government website.

I don't really see what's wrong with selling up to free up capital and then renting.

Would mean possibly not eligible to means tested benefits such as pension credit, including things like free prescriptions

Could mean if you spend it, less assets for children to inherit

But on other hand may need to sell up to pay for care anyway I guess

I'd stop funding her and let her worry about the rest! Dear god. Ignore the hints if you're not able to tell her, 'We are unable to afford to help you financially anymore.'

If she's choosing to go on expensive holidays etc. while sponging off you for essential bills, then TBH she's taking you for mugs. I'd tell her very firmly to sort her priorities out.

Some people will always take, take, take, if someone else is mug enough to oblige them.
As for her pension, maybe your dh needs to get her to understand the realities.

Maybe she'd need to downsize. However equity release is IMO nearly always a very bad idea.
As for care homes in future, as a pp said, quite a lot take both council and self funded residents, who get exactly the same care, though the self funders are heavily subsidising the others.
My mother's was like this - I would guess that at least half were council funded. And it was an excellent care home.

If you were cynical, you could say she's already spent your DH's inheritance, so why should you keep spending your DCs inhereitance too!

Your DH needs to sit her down and discuss her expectations and give her a dose of reality. Maybe she really does have enough saving to carry on, but it doesn't look like it. She needs to understand that you are not her bank.

Fair points user87382294757 but if I have the money then I don't need the benefits and I have no DC so anything I have left will go to DP or charity. Even if I had DC they would be grown up by the time I'm retired so unlikely to need an inheritance.

I would be astounded if she's not already released equity from that house and spent it and it will need to be paid back by her estate.

(Namechanged for this). I am in the situation where it my own parents who have no provision for their old age.

They do not live in the UK, they live in a country where there is no such thing as a state pension, benefits system etc. They have alsolutely no savings, property, pension, life insurance, nothing. I have just accepted that I am going to have to support them (I already pay their medical insurance and have done for 30 years). I am just hoping that my father manages to continue working until my stepdaughters, who I support, have finished university...

My parents sent me to the best school possible, paid for my university degree (while enduring a lot of financial hardship to do so), and I would not be who I am today and have the career and earnings I have if they had not. So I see it as completely my responsibility.

Errr, I'd let her know that forthcoming trip to Mexico is all well and good but she must also plan for her own domestic costs / rainy day fund. Can she afford to do both?
Tell her school fees are going through the roof now and you might have to pull out anytime.
If this woman was a director in the beauty industry she's no financial muppet. More likely delusional or a bit selfish tbh. Don't enable her OP.

@Fairylea, it's highly unusual for costs to be met. Cancer is an entirely different thing, and regarded as entirely medical, so funded by the NHS.
My mum had a massive stroke. You'd think that world be medical, too. But no. Her care costs £6k a month. All her savings are gone as are the proceeds of her own house and her rental property (she still owns the latter, but there's a debt against it of the amount that the council has paid since her liquid assets went). Now the council funds her.

Getting a lodger would seem like a good route for her to go down?

This would give her an income stream, plus company.

It’s interesting to see replies to my comment. I genuinely didn’t / don’t know how it all works, I just know what happened in my mums case.

She is not your problem. It may sound harsh, but it's not like some awful thing has happened to leave her reliant on you.
Your dh needs to have a chat with her before she loses the lot.

@purplecrane.....that's all very admirable, but heaven forbid what I feel you (the sole provider) became long-term ill and couldn't provide for everyone ongoing? The honourable plan then collapses like a pack of cards. I don't think in your shoes it can be a great feeling to know that the comfort and wellbeing of so many others - on a very basic level, is all down to you. You may not see it this way, but your parents (IMO selfish and deluded) choices have deprived you of choices that you might like to make for yourself - like taking an easier, less well paid job.

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

You’d be suprised - I visited a very smart one near me, when my mother needed care, and they said they had a mix of self funded and local authority funded ( the LA paid a on discounted ‘bulk buy’ rate. )

The one my mother actually went to ( in her home town) was less expensive, because not in London, but very nice, more like a friendly, small hotel hotel , and that had a mix of funded and self funded ( like my mother, after we sold her house ). Did an awful lot of calculations of how long the money would last but it did - and the manager of the home reassured me that the LA had never moved someone to a cheaper home.

Not sure that there are many purely LA run homes left.

Would it be possible to broach the subject of future requests for funds needing to be loans ? (because in giving her this money now you are leaving yourself underfunded for your retirement)

It might be possible to lend and take a legal charge over her house in respect of the debt amount (which could increase as time goes on) such that when it is sold in the future, you are repaid out of the proceeds before they are used to settle any other debts.

My parents sent me to the best school possible, paid for my university degree (while enduring a lot of financial hardship to do so), and I would not be who I am today and have the career and earnings I have if they had not. So I see it as completely my responsibility
Sorry. This is a bit deluded. They have treated you like an investment and not a human being entitled to any choices! For the record, my kids go to a top private school, we've made sacrifices, but I'd never expect financial repay on the level that you describe. Just kindest, love and respect.

I've had a similar conversation with a friend this week - both our PILs are in similar situations (but without homes to sell) and will be fully dependent on state pension/benefits when they retire. Both still a while away from retiring, but not far enough away that they will be able to make a significant difference to their situation now. I have no idea how they think they will keep up their lifestyles with the money they will have

Don't give her any more money, she can't let you pay for the boring things so she can spend money on the fun bits, that's not how it works. If she can't afford her own bills then she definitely can't afford holidays to Mexico.

@purplecrane while that is a very honorable stance to take for most people though it would be unrealistic, whether they wanted to or not. We couldn't come anywhere close to making a dent in even the most basic level living costs for both sets of our parents let alone support them through their entire retirement. And to be honest, I don't see it as our responsibility.

Do you expect your stepdaughters to cover your retirement?

would she get a percentage of her ex's pension? & maybe she is working out that once she spends her savings (& guilted your dh into paying for big bills) she will get extra pension benefits (not with the house she wont) BUT did your dh get help when he was at uni or just after? when you got married or when you purchased first house?

How does your husband feel about it? How are you doing for finances? If your children are in private schools, would you say you’re comfortable?

There’s a part of me that thinks you know, I’d love my mum to have s great life. If it didn’t mean that I was sewing my socks and mending a hole in my shoes, why the bloody hell not? She’s the only mum he’s going to have, why not be happy.