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

Flat could be rented out to cover care home fees. That's what happened to my nan's house. Then sold when she sadly passed.

Let her spend her money I say, you only live once.

I would be concerned if you felt she was maybe being extorted in some way or being taken advantage for her home renovations and she had been ripped off? If not then let her do her thing, especially the holidays!!

she might never need cared for when she gets older, what would the point have been in saving all that cash?

a relative of ours died suddenly after living a miserable frugal life, no extravagances, no holidays, penny pinching to his spouse who died 10 years previously practically in poverty. He had been saving the cash himself and had over 200k in savings which no one knew until he died. His children didn’t need or indeed expect any inheritance they were shocked by this as felt they grew up with nothing and were a bit angry when they found out as their family life could have been so different growing up.

Let her crack on- none of us know what the future holds!!

Definitely encourage her to enjoy herself whilst she can still get out and about. I remember my Aunty going a bit mad with the spending after her husband died. She outlived him by about 15 yrs and was very happy indeed. 😂

It's probably 50/50 though on the financial relationship with your dad. ie - he knew she needed regining in or she wouldn't be comfortable/talen care of if he died & also financial abuse never taught her to budget/finance for herself.

Unless your relying on a inheritance id just let her get on with it and enjoy it while it lasts

Are people not allowed to enjoy their money after a certain age incase they need care? At what age does depravation of assets become a consideration? My mother in her late 70s is thoroughly enjoying herself. She's going on more (expensive) holidays than she ever has before, her logic being that she's in good health so she's going to do it whilst she still can. Surely everyone who spend any money over and above basic living costs is guilty of depravation of assets should they need care, at any age. What's the criteria that LAs use?

My aunt is in a care home currently that is costing £1300 a week- about to go up to £1350. (£5200-£5,400 a month) and it's nothing very startling. In addition she still has a rented flat (£800) and a care package for that flat (£760 a month which has been cancelled but has to be paid for another month).

Her pensions/benefits come to £2000 a month. So it is eating her savings like mad. She had £115,000. It won't last long.

This position is unsustainable for people. I see what she gets for £1350 a week and it just does not cost that for her care- a small room with a bed a chair and a wardrobe and chest of drawers (not high quality), 3 meals a day which are tiny and drab and she barely eats. Two cups of tea and a packet biscuit delivered to her room. Her medication doled out. bath supposedly twice a week but usually once. Her clothing washed (and lost regularly despite being labelled with her name and room number).

To have her hair washed and blow dried once is an extra £20 a week. If she has a bar of chocolate they charge £1 a bar.

She does not require much help at all- dresses and washes herself.

She can no longer live at home but until a place comes up in sheltered accommodation- which will be slightly cheaper and give her some privacy and independence - she can not give up her home as her belongings are there and she is adamant she will not stay in a care home.

I should add she spent £30,000 on care calls at home for my uncle in his last few years and then £15000 for a care home for the last 3 months of his life and since then has spent between £400 and up to £760 a months for 3 years for care at home for herself. So she has already spent approx £60,000+ without what she is currently spending.

It's shocking. If she had no money the council would pay £880 a week for the same room and care for her. I take it the extra £500 + she pays are the care home owner's profits.

Care fees can cost 5-6k a month. Renting out a flat is hardly going to cover tht unless the cared for person has significant other pensions etc as well.

It's shocking. If she had no money the council would pay £880 a week for the same room and care for her.

If she had no money she pay all but £25 of her state pension towards it.

Correct. Care needs to be taken over trying to deprive assets by "gifting" largevsums to grandchildren ot children, too.

You can spend it on your yourself - home, holidays, etc. But they look at bank accounts to make sure you haven't siphoned it off to family to try to avoid it being used for your care.

Op, totally understand your concern, your mum’s just enjoying the freedom of having what she wants.

Absolutely corridor the flat sale to pay for care, it’ll 3 years or so if she spent it all.

My parents are just about to hit 80 and have slowed down a bit in the last year after spending all their money on thing they like, including iro £100k on multiple cruises, similar amount on house updates. Their view is that life is for living and I certainly don’t begrudge that. What they haven’t done though is downsize. Still in a v large 4 bed that is exceptionally modern. Dad says there’s room for lift when they can’t manage the stair 😂.

Also give them a decent pot should they ever need care for 8 years or 4 years if both need it.

Thanks @VickyEadieofThigh. It sounds like the OP's mum isn't even in the ball park of being guilty of depravation of assets, so what are all the posters warning about this going on about?

Thanks everybody for your thoughts - even those who've said it's none of my business and I'm only concerned about my inheritance!

Just for the record, my dad wasn't abusive, they just didn't have much money and he was very careful with what they had. They had a happy retirement together with a lot of travel, she wasn't living in a flat with peeling wallpaper and she gets out and about all the time. She's amazing and I am very happy that she's happy.

There is no question of me trying to stop her spending her own money. If she could know how long she has left and time her money to last her remaining years, that would be fantastic.

But that's not how old age works, is it? I suspect most of us would prefer to go without warning while we are still active and healthy, but we don't actually get the choice. And a significant number of us (more like 25% than 99% though!) will need long term care.

I've seen with my in laws how not having to worry about money made dealing with dementia very slightly easier. They could buy in as much respite care as they needed and choose an expensive care home without having to think twice. It was still harrowing, but money gave them choices that someone without money would not have.

I think the quite traumatic and drawn out deaths of my father and FIL, which took a huge toll on all of us, have left me very anxious about how we are going to cope when the mums, who both live on their own, need more support than we currently need to give.

However, it's been really helpful to be robustly told to stop worrying.

I'm not going to tell her to stop, it may not end up being a problem, and if it is we will muddle through it somehow.

Thanks everyone.

Check the monthly cost of a good care home. From when you are 80 keep 15 years of savings to cover it. Any year you are not there you can spend the yearly sum. Till there you need to save. So no stop spending anymore but be careful. This is if you want to be taken care in a good care home or do not weight on your kids. Otherwise you can just keep on splashing on holidays new cars new clothes and new furniture. of course if you have that money to start with, but we are talking about spending in “fun” or savings so we assume the person has money

It’s not age related.

basically you cannot give away money to intentionally avoid care costs.

so a fit, healthy 70 year old living independently with no expectation of needing future care, can give away or spend what they want and there is no deprivation of assets.

a 70 year old who is increasingly frail, sells her home and moves in with her daughter as she is struggling to cope alone, giving her daughter the proceeds of the house sale. At this point is is reasonable to think that this lady will need care to some extent, whether that’s in home care or nursing home. That is deprivation of assets and the LA will come after the house sale funds to pay for her care.

it also applies if she deliberately spends it, say she pays for an extension on her daughters home.

Because a few have given "advice" that is poor - and I always work on the 'what you say on here is read by a wide variety of people' principle!

Care homes cost more than I earn in a year. I highly doubt it is realistic for most people to save approximately a million quid by the age of 80, especially after retirement. Good plan, but completely unattainable

£75k on decorating and one holiday is a hell of an amount. She’s not being ripped off is she? I had a whole floor added to my house for less than that.

I have POA for a 90 year old relative. Yes care homes are expensive but it isn't all gloom and doom. My relative has been in the home, not a cheap one it is more than £4k a month. She has her state pension, her works pension which is small, half of her late husbands works pension and she gets extra because of his SERPs add to that attendance allowance which you can claim if you are paying your own fees. To top that up we have an IFA who looks after the money from the sale of her house. He has calculated she would have to live to 120 for the money to run out. She didn't own a mansion, a 3 bed house in a midlands city.

YABU. She is 87, always had someone control her choices, especially the generation she is from. Let her spend it all if she wishes. She has downsized and made her home comfortable. She isn't down the casino. She has all her faculties. Leave her to have as much enjoyment as she can. A Lot of people don't bother making their homes nicer or more comfortable at her age and just wait for decline. What you have described sounds Marvellous. Good on her. An expensive holiday, wish I reach 87 and do exactly as she has done. When I started reading your post I was worried she had bailed out younger relatives or something else. But she hasn't. Spent it on her home and a holiday! Great! And in the future you can look back on this time and know your mum really enjoyed a comfortable time at home and on holiday. She still has half left. Now if she started re doing the whole flat again, then I would be concerned.

Good care home cost average £4K a month, that is £720k in 15 years. Consider the pension (let’s say £1.5k a month) this is £450. Consider the sale of the house after taxes, depending where you live you might not even need any top up meaning you can spend any savings you want. Again we are talking about people who are relatively well off (good pension and one property) but not very rich at all. Totally attenable by many.

Well done you! Too many people think the opposite!
Dont panic, you will not be expected to pay for her care. If she had to go into care tomorrow, she should have enough savings left to pay for at least a year from what you say. Then depending on the value of her flat, she’ll have longer. Her flat could be rented out until her savings have gone - that would make more sense as it should increase in value (plus generate some income from renting it out).

New kitchen, bathroom, carpets, furniture, professional decorating etc. It soon adds up. She wouldn’t have got much change from £40-50k for the kitchen and bathroom alone.

She has the flat to cover care costs. As long as her pension is covering day to day living incase the savings are depleted.

You should bear in mind that not everyone will require care and out of those who do it is more often than not for just a few months.

I think there is no reason to intervene if she is in a good mental state and not being taken advantage of by trades people etc.

It is a real positive that she seems to be enjoying this time. Many 87 year olds would not have the motivation to improve their home to such an extent!