My retired mum has run out of money at 63!!!!!!

[Lilu1660]

I don't know where to turn to and not managed to tell my SO yet but my mum has told me that she and my dad have no savings left and cant pay their rent or bills this month or for the foreseeable.

My dad is in his mid 70s and works when he can plus has his state pension but my mum retired 10 years ago when she was 50 (she's quite a bit younger than my dad) and is now saying that they have spent all their nest egg. They don't have any assets as they lost their house years ago as they were on an interest only mortgage. They got to keep the market increase in the houses value when they sold so I assumed with that money plus my mum's two private pensions that she had figured out she had enough to retire. My dad has never been good with money and has never saved for his retirement but his plan was to keep working.

My dad has had a recent health scare and has been unable to work for a few months which lead to my mum calling me yesterday saying they have no money, cant pay their rent and they are now getting bank charges and could I take on some of the financial burden. I am an only child so have no siblings to help but I have two kids of my own, a mortgage that is due to double in a few months because of the rising interest rates and my outgoings are spiralling out of control with rising living costs...we are barely scraping by as it is...and its only due to get worse.

I suggested maybe she go back to work (she is totally fit and healthy) but she told me I was being 'cruel' and 'unhelpful' and she wishes she belonged to a community where children took care of their elderly parents. She has not answered my calls or texts since.
I don't understand what her long term plan is? I have a very strained relationship with my parents due to having endured a pretty poor childhood and we don't really talk or communicate very often so they have never been open with me about their finances or life plan.

My mum is my biggest worry. She is only 63! She could conceivably live until her 90s. I cant wrap my head around the fact that her retirement plan seems to have been constantly dipping in to dwindling savings whilst relying on a man in his mid 70s to pay the rent and bills. And now that he cant work, is her plan to now put that financial pressure on to me? Or worse, to come and live with us for the next 20-30 years? We don't have a good relationship so I cant see how she would ever have thought that would be her life plan.

I am now worried sick about how they are going to survive paying rent, spiralling bills etc but I don't feel its the right thing to do to help them. If I help this month what about next month? And next year? And the next 20 years?

If I were to help them in any way short / long term it would be a drop in the ocean compared to what they need to cover themselves every month (their rent alone is £2k a month) and would negatively impact my own financial safety and that of my children's. I feel utterly torn and lost and just cant believe their stupidity and not planning for / seeing this coming!

Is anyone else out there dealing with this?? Or does anyone have any advice at all xxxx

On the gov website. Just google it.

The OP seems to have buggered off but my only advice would be: don't give them a penny. Once you start it'll become the norm and you won't be able to stop. She can get a job as a shelf-stacker or admin assistant if she needs to, nothing wrong with that.

They need to relocate to somewhere with a cheaper rent for a start since they can't afford their current accommodation. Your mum can take on a part time job and link in with CAB to see what benefits she'd be entitled to. If you're struggling to make ends meet yourself then you quite simply can't take on their problems as well and your mums attitude is quite entitled to expect that you would. They also need to link in with CAP or Debt Action to look at how they will budget the money they do have coming in and how they can repay what they owe. It sounds like your dad isn't involved really and your mum is doing head in the sand and hoping someone else will fix it for her instead of owning it and tackling it herself. All you can really do is give them the advice and the rest is up to them.

As far as I recall it's even more complicated as there were two types of contracting out (Serps?) - and no one ever explained it properly to most employees

I find it hard to believe that anyone would even consider retirement at early 50s who privately rents, especially paying 24 k a year to rent! She didn’t own a property outright, or have a council house?
What did the OPs parents expect to happen?

Most people did not have a choice about contracting out - contracting out meant a lower NI payment. If you paid into a workplace pension, in most cases you were automatically contracted out. This was sold as a benefit as we were told you paid less NI to encourage people to pay into workplace pensions. At that point, it did not affect how much your state pension was. It was till counted as a full NI payment. The system only changed later and so lots of us get a lower state pension as a result.

OP? @Lilu1660

Echo what people are saying about missing years to get maximum state pension. I assumed I had done enough years but in fact just paid £3,000 more to make it up to full contributions

My dad did this to me. He was sold a terrible illiquid investment that tied up most of the pension he needed to live on. He seemed surprised I didn't have 70k to randomly take some sort of share of a care home off his hands. I had made the mistake of previously giving him my entire 10% bonus, which was 5k, and he decided that meant I was his meal ticket. I was really sad that he lived in debt all his life, but he had the money. He was just terrible with it and me giving him more money would have made no difference he'd have spent everything.

@antelopevalley no one would have a lower pension unless they chose not to work for the required number of years once the system changed .

I checked mine, thanks to the poster that gave that advice, It looks like I am one year short, I have 46 years, if I buy another year at about £800, I will get an extra £1 a week so won't bother, that is the maximum I can get

It's confusing

If you have 46 years?

Is it the SERPs thing

OP, I second everyone saying that your mum needs to check her NI record to see how much pension she is forecast to receive.

They definitely need to downsize/relocate to pay less rent. They might be entitled to UC but your mum would be expected to find work if she is fit enough.
They might qualify for local housing for over 50's etc if there are any vacancies.

DO NOT give them any money. It is not down to you to keep them, harsh as that sounds, they are in this position due to their life choices and you cannot let their choices ruin your life and you simply cannot afford it anyway.

It doesn't actually say but I think it must be, I was contracted out for a number of years around the 90s and that does seem to fit, I started work at 16 and early retired at 62 with private pension. I know people that were contracted out if they don't make up the years get less.

You do have to be careful paying extra years, in the past people have been told they need to pay extra and then don't get any benefit from it so best to check thoroughly before paying for extra years. It does seem overly complicated

@antelopevalley
This is correct.

The low NI has now been discontinued and there is one rate for all. However although I have paid the full rate, it made no difference to my pension forecast. I also had to pay extra years but I don't qualify for a full pension.

You are right about this never being explained fully too.

@Clymene, I'm being really obtuse I'm sure. I've tried googling and looking through Gov.UK, but still can't find the right page. If you have it to hand, would you mind linking to it please?

You gov check your state pension. Is what you need

@Elmrosie
You need to set your own password and log in for the Gov.uk site. Then you will need your NI number, then you can check year by year whether a year is counted as a full year or whether there is a shortfall. I think you can make up shortfalls for the last 8 years atm, but that changes early next year.

Weird how someone can live on benefits their entire life and still get a full pension when the ‘retire’ …retiring from claiming benefits must be so hard! My sister loved ‘pay day’ as she called it, pay for doing jack shit her whole life, council home paid for, free school dinners for her kids when they were younger, school uniform grant, etc etc. Now she’s retired, it would be laughable if it wasn’t so tragic, awful thing is her 3 kids are doing exactly the same, so the story continues…

Thanks @MissMarplesGoddaughter. I've already done that and am fully paid up. What I'm interested in is getting my employment history by NI number, so I can figure out whether I have any pots that are worth consolidating. Doubt it, but in the 80s as a youngster I flitted about a bit!

Yes it doesn't seem fair when people are penalised for not paying enough NI

I mean in comparison

They need to look at benefits they can claim until your DM state pension kicks in at 66 or 67. And she should look for some p/t work...

She needs to get a full time job!

Exactly. With husband's state pension and 2 private pensions, even with a modest one bedroom rent element, there Universal credit is likely going to be wiped out by the pensions, or any Uc they get is likely to be very little, so if the pensions won't pay for housing and living costs, op's mum is going to have to look for work unless the dad will qualify for a disability benefit and she can be classed as a carer.