AIBU to wonder why a pensioner struggling financially would not use housing equity?

[Powerbungalow]

I'm not being unsympathetic

Theres a lady on the news at the moment, saying how times are tough and shes only cooking one meal a week - imagine she's eating cold food.

One thing that stood out though "I own my own house and it costs in maintenance" Depending on where she is, would you not get a life time mortgage or sell and rent? She has a big asset, why not use it to have a better life? I know I would.

She may be holding on to it for inheritance, but she didn't say - if so, then can her family help. It just seems totally crazy

Surely that’s only if they take out a huge lump sum? If they are taking 5 or 10k a year are they still impacted?

And why are equity release a con?
People keep saying it without explaining why.

@KatiePricesKnickers it isn't a con people just don't like seeing their inheritance spent.

@Bjorkdidit

My mum and stepdad did do an equity release about 10 years ago to pay for some adaptions to the house. These were relatively small adaptions and as a family Im sure we could have funded themselves.
We were not supportive of them doing this, not because of trying to protect 'inheritance' but because of the situation we are now in which is trying to fund decent care homes.

I have never expected to inherit, I always envisaged their home to be used for care home fees.

Maybe if you have a high value home and need a relatively small amount of money, the equity release might work for you. I just don't think it stacks up for people like my mum.

It isn’t the case - she’s taking crap - if you rent for instance and ‘only’ get the state pension , have not much in savings or other property assets and are on your own - you will get allowances via UC towards rent , council tax and service charge, ‘unless ‘ you have really incredibly cheap rent -

Downsizing may work well if you’re moving from a fair or good sized house, to something substantially smaller, but for many, living in fairly modest sized semis or terraced houses, there isn’t much available that would make it worthwhile - and so many flats, especially more recent ones, have hefty maintenance/service charges.

In many areas, bungalows are highly sought after and are far from a cheaper option.

Because my bills are nowhere near £1k a month perhaps

I do wish people would stop with the ‘they worked all their lives’ - hate to sound negative against women but it’s just a fact - many many women , particularly in the past, often did the very odd bit of part time for years on end, if anything at all and got national insurance credits towards pensions but often are the first ones playing the ‘we worked hard card’ and ‘young people today want it all’ ( and I’m 64) - I don’t begrudge them having paid for houses or savings , it is what it is and times were different - I do begrudge them feeling they have an entitlement to WFC and having little empathy when younger family members are paying rents or mortgages that are breathtaking in many parts of the country for very very average homes , unless you live in a cheap area- or childcare bills that are gobsmacking, whilst their mother had the kids 2 days a week etc, etc . I also know several guys that have done little work too over the years, old school friends if my husbands - middle class guys too who somehow managed to make themselves unemployable and kept the mental health issues going for years , the only mental health issue they had was that they were bone idle and quite happy getting by on not much at all and their social housing flat paid for - they too will have years of NI credits and get topped up with pension credit in 4 years time . Would I want to live like this- nope, but some are, they would rather be a bit skint than have to work . I’m a centre left voter, so I am not sure what you do about these issues without causing a lot of hardship that then creates other social problems, but I do know the idea that ‘all ‘ are poor through no fault of their own is bullshit - some are by circumstances totally beyond their control, others are simply by not helping themselves and making poor decisions -

with regard to equity release as I mentioned before, I’m pro it in theory, it has changed a lot and is much more tightly regulated, but it works better with housing with very good equity (£200,000 plus) - over 72 and done as income or a mix of income and a smaller lump sum - not as a giant lump sum!

I would say that’s when people need to actually truly downsize, and not “downsize” by going from a four bed to a three bed. If you downsize from a paid off house to a flat, then invest the remaining balance from the house sale you can use it to supplement your income. Now of course that would mean the next generation has less of an inheritance but why should the taxpayer pay to prop up individuals’ inheritances?

I live in arguably one of the most expensive cities in the North, and the price difference between a three bed terrace and a two bed flat is in excess of £100k, and these aren’t even retirement flats. Bank the £100k, even at 3% interest that’s an additional income of £3k/year. Which in your example would pretty much pay for the full service charge.

Equity release is no more of a con that personal loans are.

At the end of the day it is about getting money now, and that is going to cost you more money in the future, the same as any loan.

Of course some are better deals than others, but that goes for all loans, whether they be mortgages or credit cards.

It goes back to pensioners expecting to be able to keep the exact same standard of living without working for it = expecting the government to keep propping them up.

One may be able to pay for a nice house while working full time but surely anyone with an ounce of sense would realise that lifestyle changes would need to be made once your income goes down? It’s really not rocket science but so many pensioners seem to struggle to understand this. Of course you can’t pay for the same standard of living on half the income.

There's a simple solution if you don't want an elderly parent to use equity release, because it's going to reduce your inheritance (which seems to be the main argument against it). Put your hand in your own pocket and help out.

obviously she could move… doesn’t need to use an equity release scheme

Thats fair enough. Im glad your bills dont come anywhere near 1k a month and its plenty to live off.

I was more talking about unexpected expenses rather than routine running costs. But I guess if your council tax, food, water and energy come in way below 1k you have lots left each month to save for those things anyway which is very good to hear.

Yeah I have savings. I'm struggling to think what id actually spentd 1k a month on tbh

C tax. £125
Electric £50
Gas £15
Internet £28
Car insurance £30
Car tax ,£1.70
House insurance £17

So that's approx £255. Leaving £1245 for food, social events savings etc

Water
TV licence
TV Streaming
Phone
Car maintenance and MOT.
Fuel.
Roadside assistance.
House Maintenance/Boiler Servicing.

Gas at £15 a month barely covers the standing charge. You must have a super well insulated house. Or a flat. In which case you will need ground rent. House maintenance is supposed to be roughly 1% per year. You can ignore this if you are willing to let your place fall into ruin, a lot of people do.

I think all the above plus reasonable amounts for gas take me up to about £700 a month.

I think if you are a single person then state pension will pretty much pay for your bills and food. It won't give you a lifetime of opulence cruising the world though.

I don't have a tv so don't waste money on licence and streaming etc

Sorry thought I'd added water. That's £20
And phone is £7.90. Ground rent is peppercorn about A£50 a year so u can add my ¢1 a week on if you like

Electric and gas are with utilita so no standing charge. It's only used to wash up or if I have bath ( shower is electric) and I'm usually away during coldest part of winter so not blasting heating

And where did I say anything about " cruising the world"

So even in your theory of £700 ( which is still higher even with the " extras " included that would still leave £800 a month spare

Blimey:

Council Tax: 281
Gas and Electric: 290
Insurance (house) 100
Insurance car: 50
Car Tax: £12
Broadband, Sky, Phone, Netflix, etc: £130
Water: £50?
Boiler Servicing and Insurance: £30
Pet Insurance: £45
Pet Plan £35

About £1000 before leaving go.

Have some sympathy for the maintenence. We probably arent talking having the aga serviced and her soft wood floors polished and the thatched roof redoing as per heritage england's rules.

For an old lady, living alone with no help, no tools or handy man skills, basic house hold maintenance and help can add up.

a man to come and look at the boiler can cost hundreds. Need a lock fixing? Another couple of hundred. Little leak somehere? Need aomething drilled into a wall? A blind putting up, new curtain rail? Electric kept tripping and you should probably have it checked out in case? Fence come down? Need replacement wired in fire alarm? Etc etc

I wonder how many posters on here have husbands who sort this stuff out.

Must have a much bigger place than me. And I don't have pets or spend over £100 on tv . So that be why it's higher

Is that just for you or other people sharing those bills

Or sort it out themselves. If you have the physical capabilities why would you need a " man" to do it. ?

You are not wrong of course. But is has been the way of society and certainly for the older generation.

I'll be sure to tell the next old lady I see that if she cannot repressurise her boiler herself she is an idiot 🙄

Posters on here are shocking

Also - the people who most often spout "you should be able to do that yourself are the ones with husbands who do it... the fucking irony.

That would be if I were on my own so I have deducted 25% from CT. I can't imagine I'd use much less gas a electricity as a singleton. I don't spend £100 on TV, I have included broadband and telephone.

I've actually worked out moving costs in relation to downsizing and once they are factored in, it would take ten years to claw back the cost so I'll stay where I love.

You also have to want to do it. Our odd job man is £50ph. He's great and changes the lightbulbs too. I am handier than my DH.

Lol My mum born 1946 was perfectly able to do plastering decorating gardening diy and basic electrics and we were all taught these skills .

She got slower at doing them as she aged admittedly. So surely she was the " older " generation

Your mum was ✨exceptional✨

congratulations.

Can you see things from another person's (very common) experience?