Spending downsizing cash

[CueilleLeJour]

I'm really not sure if I'm being unreasonable here.

Mum is 87 and downsized a few years after we lost my dad. She bought a nice little flat and had £150K from the sale.

Growing up, we never had much money and dad kept a close hand on the purse strings. Mum was left with a comfortable but not huge pension, and some moderate savings which she has spent over the last few years.

Since downsizing, she has basically had access to more free money than she's ever had in her life. In the last year, she's spent nearly half the £150k. Mostly on the flat - new kitchen, bathroom, carpets, furniture, professional decorating etc - but also an expensive holiday. It's clearly been an amazing feeling for her to have all the money she could dream of and spend it without my dad's disapproving eye peering over her shoulder. Part of me thinks it's great and she should just enjoy it while she can.

But part of me is really alarmed at her getting through half the proceeds in a year, and I worry about possible future care needs. My BIL's mum is 90 and has been in a care home for 3 years and it's just burning cash. They wouldn't let her in without proving she had 2 years of costs up front - which I think was about 140K.

My mum is just convinced she won't ever need a care home, and I know she's better off than many people who have nothing put by. It's also really none of my business, it's her money to do what she wants with. It's not dementia or anything, just someone who has never really had to make financial decisions having a whale of a time splashing the cash.

But am I right to have a little anxiety about it all?

YABU You only live once, she's right to spend it while she can
YANBU It's a bit reckless to spend half your downsizing profits in the first year

Let her have her fun. At 87 she's not got long left so let her spend it while she can.

She will still get care even if she has no money left. It will just be not as 'nice'.

If she's spent her life worried about purse strings, I think it is difficult to have a conversation that when she finally has the funds - she should yet again not spend them just in case

You are right to be concerned, but I'd probably let her get on with and enjoy herself

Although it might not be what you would do it's her choice at the end of the day

She is not going to keep refurbishing her flat so I assume the vast chunk of the money that's been spent on this is a one-off. If you are concerned about her lack of money management skills, then maybe you can help her set up a budget to make sure she doesn't struggle for anything going forward. Assuming, she has good 10 years ahead of her, it would be nice to make sure she has reasonable funds to not worry about the future.
Wouldn't probably worry too much about care funds. She will get care even if she hasn't got savings and she still has a flat which can be sold to finance it if needs be.

You don't see many 90+ year olds going on holiday.

I would encourage her to enjoy it while she still can.

I think it depends how much her fiat is worth, I live in South East England and a lot of homes g here need you have a property or cash worth about two or three years fees.

Her spending must have added some value to flat so it’s not money gone forever.

I had a similarish thing with one of parents who spent about 40k on holidays in 2 or 3 years. Now 6 years later they are in a care home and can hardly walk and I am pleased they went on those trips.

Ah, that last paragraph is lovely and a really helpful way to look at it.

Yes, her flat would cover 2 years of care fees. I was thinking it would be harder to sort out if it was tied up in the flat but of course, if she's in a home she doesn't need the flat.

Thank you.

The reality for many people is four brief and sometimes unreliable visits a day in their own home, which is a pretty grim existence. BIL parent had choices about their care which have given them the best possible quality of life in their current state of health. So I think having more money would give her more choices.

But she may never get to that point and I absolutely take on board that it is her life and her money to do what she wants with.

It depends.
If she will have enough money from her pension to cover the care- which is at least £4000 a month (depending on your area) I would say it's OK for her to spend all that money.

If her pension won't cover it, and her flat isn't worth enough to cover a potentially 5 years of care, I think she should be more responsible.

Nowhere near 4K pension a month - but who does?

Personally I'd be telling her to transfer ownership of the flat into a trust so that it doesn't get taken with care fees (that may or may not be needed).

Not everyone goes in a home, why are you telling her to not enjoy her life just in case she needs to go in a home. Having been a nurse for many years, many elder people just drop dead; stroke, heart attack etc. or they succumb after a short illness brought on by something like a car crash (broken ribs), a fall or a broken hip.

Think about what you'll feel guilt over when she is gone, will you wish you'd told her to cut back so she could afford care fees (that weren't needed)? or will you regret telling her to not spend? not supporting her and encouraging her to gain some happiness in her later years and do XY & Z when she wanted too and had the ability too? Even if that xyz is decorating her place or doing the garden or going on holiday... whatever gives her joy, even if you don't agree with her choices.

Let her enjoy spending the cash she has that she didn't get chance to spend in her previous 87 yrs of life. Or is the real story that she's spending your inheritance?

Spend it all. At 87 I would want as quick an exit as possible in fact I would be booking my spot at Digitalis if my health even faltered a little bit. My idea of hell on earth living in a nursing home I can see why your DM does not want to consider this. You know your time is limited at this age enjoy it til you cannot anymore.

If an 87 year old wants to treat herself to her first expensive holiday then good on her!

I'm not telling her anything! It's just been slightly alarming to watch.

Transfer the ownership of the flat so it isn't used for care home fees - so manipulate her finances to let the state pick up the bill? I'm not at all interested in protecting any inheritance, I'm just concerned about her possible future welfare. And maybe slightly concerned we will end up looking after her or paying for her care, but I don't think that's my main worry.

Only about 15% of people over 85 go into care homes, though reading threads on here you would think it was only 15% that don't

I would spend the money, she will still have the flat anyway

All the elderly people I know say they would choose a quick exit, but sadly we don't get that choice. She would never go to Dignitas. And there are a great many elderly people in care homes, some better than others. Which is why having financial resources could make a difference for her.

Your mum's money wouldn't touch the sides if it came to care needs. She'd need a lot more than she ever had to make any appreciable difference to the quality of care she recieved. If she doesn't spend her money it will only go towards paying for the same level of package she'd recieve for free if she had nothing. Plus only a minority of people need care. They scrimp and save just to end up leaving the money they could have enjoyed to their children. So unless that's what's concerning you, I'd stop worrying and be happy for her. It sounds like she's had a hard life, and she deserves this. Don't fall into the trap of being another source of control in her life.

I read 1 in 4 will require long term care, but that might include care in their own home.

There are also many elderly people being cared for by family, which can be very challenging.

I agree it's a lottery. Most won't require care. But if you've been involved with someone who does - and watched their savings dwindle at a rate of £1.5K a week - it does make you think about how you would cope in that situation.

So is there a certain age when you should stop spending any money, not go on holiday, do up your house or buy a car because you should save it for care.

Just so I know...

In that case - let her spend it! She has lived frugally all her life; and you'll want her to have some happiness.

OP your mum’s flat would be sold, this would pay for two years care, then she’d either move to a cheaper one or possibly be allowed to stay there.
She may never go to a care home and be able to stay at home with care visits. I worked as a carer in the community and in a care home and have seen many very ill and frail people live in their own home right up until the end.

I'm not suggesting she live in penury, more that recklessly spending half your savings in one year might not be great financial responsibility at any age.

Reading this i think your concern comes from the right place. I‘d be inclined to agree with everyone who said „she‘s 87, let her have fun.“ but i just burried a 93 year old aunt who spent her last 3 years in a care home and had almost no cash left, but still a big house that could have been sold. Maybe just talk to your mother and tell her your concerns. She has every right to spend her money if she wants to.

Meanwhile i live in a country where children have to pay for care home fees if they earn more than 50k€ per year(which is not a lot) and my MIL sold her parents house, lives in a modern and spacious rental appartment, goes on vacations and retired early because she calculated(without the recent inflation) she could uphold her lifestyle until she‘s 85. She could have gotten an insurance for care but she didn’t. Similar story but she‘s decades 30 years younger and it might become our problem instead of hers like with your mum.
So maybe don‘t worry too much.

I think she's been quite smart with the money.

Most of it has gone to make her flat perfect for her needs and a lovely place to live.

My PIL spent £££ on their home when they retired to make sure it was in great condition and brilliantly maintained in anticipation of not being able to face doing this when they were older.

Realistically though she's spent a lot she's not going to be buying another new kitchen for example so I'd expect her rate of spending to decrease.

Having a nice home is really important as you get older and she's still got money to buy in care if she needs and eventually the LA will step in. They prefer supporting people in their own home (much cheaper) so it's good she's made it a nice place.