To not understand what she’s spending it on

[Idlovetoknow]

It’s my mother. She’s a pensioner and a widow, but she working. She cannot deal with her finances. She’s been on the phone tonight weeping over how much of a dire situation she’s in financially, but I don’t see how.

income from work: £1100 (after tax)
state pension: £800
widows pension: £1600 (think this is after tax too)
private pension: £200/300 (she was wooly on this)
so total income around £3600 a month

No mortgage, no rent, no grounds costs.
council tax £200 a month. Power £150 (let’s say 200 to round up) food and pet food £400, car £450 petrol £100, health insurance £200, phone £50, sky £50, pet insurance £80- that’s £1300 at an absolute max

i don’t understand. She’s not being frauded or taken advantage of, but i don’t understand. I try to talk to her for instance tonight when she rang frantic over money but she gets into such a tizz she can’t tell you anything. I’ve asked for months for all bills and bank statements to go over expenses but she can’t produce them

Anyone any ideas?

@CecilyP ^^ that was for you didn't highlight your quote.

I think from what I understand that that specific tax code is for her current job. I don’t understand tax enough or her situation enough to understand why. From what I looked up it’s a straight 40% tax on her salary rather than being an additional rate tax payer

I can't help wondering what sort of 'financial adviser' she saw. It could be that she's been incorrectly advised, or at least didn't really understand what she was signing or investing in.

What she really needs is not a financial adviser but a tax specialist from an accountancy practice, who could look into the whole disastrous mess and find out what's going on.

Oh and by the way, so many people have suggested she signs up for online banking. Thank goodness she won't - can you imagine the almighty mess she'd get into if she had that to contend with as well?

I think she needed and advisor too as she had quite a bit of cash from my dad and he had investments etc and whilst it wasn’t losing money it was just sitting there and she needed some paraplanning around the pensions, around the pensions she’s done the opposite of what she was advised basically. The advisor also said she needed to see a tax specialist but she took it as the advisor being unhelpful and refusing to help and trying to take more money. Rather than it not being the advisors job. Again she wants me to advise on this but I can’t

she can’t remember the name of the advisory firm. We’ve asked to see the fact find and the recommendation letter but she can’t/ won’t / forget where it is. She’s in a medium risk investment, and as she’s a beginner I can only assume it’s a managed fund but that’s guess work. But her risk tolerance questionnaire must have come out as willing to take medium risk.

i think you need to step away op @Idlovetoknow
pass her to a financial advisor and leave her to it.
you are too close for her to listen to you.
she denies/puts obstacles up.
just point her in the right direction and change the subject,

If it is not online gambling/ slots (a serious problem in the elderly) then it could be compulsive online spending. In a large house you might not see that there are piles of new clothes/ unopened parcels. Her defensiveness suggests that she knows that she is spending it? Or as pps have suggested this could be the start of cognitive impairment which can lead to any number of situations. My elderly relative ran up huge phone bills because she would wake in the middle of the night completely confused and make multiple calls to the speaking clock.

Whatever it is, it sounds like you will have to be very firm, “Mum, I’ve told you I’m not a financial expert, and I can’t give you even the smallest advice if I can’t see the paperwork, so let’s not talk about it”.

I'm confused. In an earlier comment you said you lived far from your mother and couldn't hurt stop by and see her. Then said she visits you and "forgets" paperwork you can review and hopefully help her with finances. I do agree with many that dementia should be considered. My father kept saying we stole his money, we didn't but got guardianship as he was giving money away. Then my father started forgetting how to drive home, etc.

Then in your comment above (if I am replying correctly) you say you see her weekly. So which is it? And could you address her budget asking for the statements vs asking for the bank statements first?

@Idlovetoknow

I have only read your posts.

I think you need to grey rock your Mum.

I think you need to say something like

Mum, if you come visit with 2 years bank statements and copies of your payslips and pension letters for the last few years I will look through it and try help you. However what you need is a tax specialist and he will want to see that paperwork too. We cannot afford to help you, we struggle to afford food and heating and are working 2 jobs each. Sort the paperwork and stop expecting me to solve the problem when you aren't doing what you need to.

Do you have an email address for your Mum? If so I would email a list of what she needs to bring.

Let her tantrum and scream and shout but continue to "grey rock" thereafter you can simply say "we are struggling to afford to eat so either get the paperwork sorted and bring it or don't but I don't want to hear about your money issues when you have 2 houses and a huge income".

If she stops speaking to you ENJOY THE PEACE

women of 68 only became eligible for state pensions on their 66th birthday. Some were 67, depending on the month they were born. So she's won't have left her pension before claiming it.

It will be 66 regardless of the month she was born. If she is nearly 69, and she claimed recently, she could have received a 3 year lump sum which would then be added to her salary and private pensions for tax purposes and paid through PAYE. This could be where the 50% comes from.

Whatever it is, it sounds like you will have to be very firm, “Mum, I’ve told you I’m not a financial expert, and I can’t give you even the smallest advice if I can’t see the paperwork, so let’s not talk about it”.

Thats about the long and short of it. Even the most expert financial adviser won’t be able to advise without seeing the finances they are advising on!

Having given it a bit more thought, if her state pension is £800 a month, which sounds about right, it looks like she did take what she was due from delaying her claim as a lump sum which would definitely have bumped up the tax she will be paying in this financial year.

Ok so I'm no mathematician but-
Income from work £1100 = 1320 taxable ( based on 20% tax )
Pension £800
Widows pension £1600= £1920 taxable
Private pension £200/300 = £240/360 taxable

Income 3700 month-or £52100 taxable year
The fact her taxable income could be @ 52000+ would explain the 40% tax code ?

Without her being transparent and showing you statements you can't help her .
All you can do is tell her sorry you can't help until she shows you bank statements/ pay slips .

I think this is it, I don’t quite understand how tax all works to have a grasp on it but she’s blaming me because i couldn’t tell her what to do, and said she needed a FA, she saw an FA and did the opposite of what he said

i think she’s paying 40% on her paye salary but I think she drew the lump sum last tax year

In fact you could just state, I told you to see a FA because I don't understand or know enough to help. He told to to see a tax specialist, you refused. My advice is the same as his, see a tax specialist.

It will be 66 regardless of the month she was born. If she is nearly 69, and she claimed recently, she could have received a 3 year lump sum which would then be added to her salary and private pensions for tax purposes and paid through PAYE. This could be where the 50% comes from.

@CecilyP I'm not entirely sure what you mean, because you appear to be conflating state and company pensions.

The other pensions she gets- her occupational pension- can be taken whenever the company scheme allows it.

I got my occupational pension at 60.

My DH got his at 65 because he worked up till then. But the company allowed employees to retire at 60 (obviously losing some pension compared to working longer.)

Widows pension £1600= £1920 taxable

@whowhatwerewhy it doesn't work like that. The pension from her husband is taxed at source once all her other income is added on.

My mum gets £xxx as my dad's pension.
She also get the state pension and a tiny pension of her own.

The amount from my dad's pension is taxed at source by his company (she gets a letter each year with the figures.)

That is the net amount not because she pays tax on it but because when her state pensions are included she's over the £12570 allowance.

HMRC don't tax / reduce a state pension, to claim tax. The tax code is applied to the private pension, if the overall total of all pensions is over the annual allowance.

It's also not a widow's pension. It's a spouses' pension. and the person who earned that pension can actually name anyone as the beneficiary.

I was referring entirely to her state pension. I have left the company pension out of it.

when I my mother was like that eventually came out she was putting money in MLMs and pyramid schemes

@CecilyP Her mum would not be eligible for a lump sum if she deferred her pension.

A lump sum is only available if you reached state pension age before 6 April 2016.

so, 7 years ago she'd be 61.

She could have an enhanced pension but the £800 a month suggests she doesn't.

It's all a bit irrelevant anyway isn't it as the OP isn't an FA and she has never seen her mum's paperwork.

In a way, there’s not really any right or wrong answer when claiming delayed state pension. Not without a crystal ball to know your life expectancy.

There’s 3 choices

1 Take from the date of your claim, then your pension will be more than £800 per month
2 Backdate for a year; again you’ll get more than £800 but not so much more
3 Take the backdated pension as a lump sum, which given other income is likely to put you in the higher rate tax bracket

However, that would only apply to last year in that was when she claimed.

Sorry cross post, Southernlassies, I didn’t realise that the lump sum had been done away with for younger pensioners. So, the enhanced pension for deferring would bring her state pension up to over £800 per month. This is another source of income that OP doesn’t know about. The 2 payments would be shown separately on the bank statements OP has not been able see.

OP, please ignore point 3 on my previous post.

But I think you’re right, I think that’s what she’s done, she deferred her pension and then took a lump sum, she was very specific in that it’s state pension.

I’m confused

Sorry for the confusion OP. Southernlassies will correct me if I’m wrong, but I think point 2 is still valid in that you can backdate your claim for up to a year from the date of your claim. This would lead to a less substantial lump sum being paid. However as your mum has so much other income, the sum could put her in the higher rate tax bracket in the year that it is paid.

The reality is your mum has a high income and no mortgage or rent to pay. She really should have no financial worries. And she definitely shouldn’t be burdening you when you’ve a young family to look after.

But I think you’re right, I think that’s what she’s done, she deferred her pension and then took a lump sum, she was very specific in that it’s state pension.

Given that your mum hardly knows what day of the week it is( regarding her money) I'm sure she is wrong.

There is no lump sum for women aged 68 who take their pension later than when they are eligible. I know. I am one of those women (close to your mum's age.)

She could have deferred her occupational pension, from her job she still has. Occupational pensions pay out a lump sum (whether you take them early , on time, or late.)

Anyway OP it's not your role to sort this out.
Your Mum is an adult. There is no way I'd burden any of my children with this or behave as she is.

You need to let go of it.

The more I read the more it sounds like an elderly relative of mine who was cash and time rich but seemed to think me who was cash poor and time poor had to run round helping her or I was a terrible person refusing to help a helpless old lady.

When the reality was I would waste my time finding a new car insurance policy for her and she'd ignore me and ask the man who owns the local garage who had so little information to go on he just recommended she stick with her current insurer. Which literally ended up costing her thousands. So I understand how infuriating it is for someone to go against the advice you take the time to work out for them. Ignoring the financial advisor must have been a huge mistake for her and it does sound like she wants you to do it all so she can blame you. My elderly relative wasted thousands on solicitors advice and just said she wouldn't use them again rather than me try and work out what was useful. She just moved to another solicitor and the previous advice was wasted. Although I at least got to speak to the new solicitor so the advice was more useful.

It's infuriating but I ended up saying not my circus not my monkeys and she ended up using other random people in her life for advice (like the butcher I kid you not) and I gave up worrying about it as it was her money to waste. It was also a case of her veering from crying about all these problems heaped on her and burying her head in the sand (which resulted in the problems of course) And repeat.

You have my sympathy. Would nodding along and saying that does sound tough, that does sound hard, well if you feel you must cancel them then you should help you manage this situation for your wellbeing? Remember her circumstances are not your fault and not your problem.

@Idlovetoknow I wish she'd peck your brothers head as she is yours. Next time and every time she calls say

"I'm not discussing your finances any more mum and if you do start I shall end the call"

And mean it. I had to do this. My mum would of course call back again even during the night. She did stop when she realised I just wasn't having it any more

You have a Very busy life she doesn't so has more drama llama energy