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

In other words you don’t have one.

The invlusion of pension pots in tje eatate for IHT was to close a tax avoidance loophole that opened up after the pension freedoms brought in by George Osbourne. Previously you had to use a DC pension pot to buy an annuity, but that was changed to allow people more freedom, so they could leave money in the pot or draw out lump sums from the age of 55 to spend on what they liked. As they were not counted in the estate for IHT purposes but could be used to store money (and there are great tax breaks for lutting money in to them), they became a great tax dodge for high earners.

It still won't affect that many people as you woild have to be pretty well off to have a DC pension pot that you a. don't need to use to fund your retirement and b. that is large enough to tip your estate in to IHT.

How does it vastly benefit me? I get SP. I have a PP and 50% of my late husband's PP. I pay the right amount of tax. FFS explain how I'm vastly benefiting ? And I do want you to tell us what your solution would be.

But you certainly moan about everything else. Who on here has moaned about paying tax? It's a fact of life. Death and taxes. You're making stuff up to suit your agenda.

The irony is some of the loudest moaners on here are the ones who are taking a lot from the state themselves.
I realise that pps might not have children, but the ever-suffering young families who are utterly convinced that no one has ever had life as hard as them and they are unique in paying for pensions for the older generations are themselves recipients of maternity pay, child benefit, free childcare, UC top-ups worth thousands every year.

Have you considered that the reason why a smaller proportion of people born1937-46 were in full time work? I would think those were mainly women, as many men of that age were very much of the ‘breadwinner’ mentality.

Looking after a home and family has certainly changed in my lifetime, born in ‘46, and even more so for those older than us. No fridge, no freezer, no washing machine, no microwave, no car, no supermarkets, no convenience foods. Few homes had central heating, many had no bathrooms or indoor lavatories. Clothes were often hand sewn, or knitted. Women often looked after older relatives who lived with them.

Life has become much easier in those respects, far less labour intensive, allowing younger generations of women to use childcare and develop careers, and therefore work for a bigger % of their lives.

They haven't considered anything because they jump on the bash the boomer bandwagon. Most of the moaners haven't got a clue what life and money was like back then and don't want to know. Our 1st house had no bathroom and the toilet was down the yard and up the street and was shared with a neighbour. This was late 1960s. We lived there for 5 years with 2 small children. I'm sick of these nasty people. I'm thankful my own children, and my eldest grandchild, have a standard of living far beyond what we had and I'm thankful they're not full of bitterness because I get a SP.

It's actually not quite that simple, the tax free transfer to another beneficiary could only happen if the original beneficiary died before the age of 75, after that the transfer was/is taxed at the receivers marginal tax rate. I'm not quite clear how the changes to IHT affect this. As previous poster it does encourage spending the pot, which is after all what it is for and not to over invest ( I know not a problem for most people). This does affect me, and I'm wondering about drawing the tax free lump sum, gifting it and hoping I live another 7 years, luckily I'm in good health, so deprivation of assets won't apply, in any case I have other funds available.

🤣

Your ignorance on the above is a "you" problem. You seem determined to sit in judgement while claiming to have all the answers.

You' are out of your depth. Perhaps you should consider the old saying: "It is better to keep one's mouth shut and be thought a fool than to open it and remove all doubt."

HTH

Also often forgotten is that women had few rights. MIL became pg in 1960, DH born Aug 61. MIL was a teacher. She had to leave her job Easter 1961, before she looked "unseemly". No mat pay, no mat leave, no entitlement to her job back. No TV until 1974, no phone until 1978, no family car until 1970. She was evacuated from her family during WW2.

@TheyGrewUp my MIL is slightly younger but worked at a department store, she was allowed to stay on whilst pregnant but wasn’t allowed on the shop floor unless customers saw her. She wasn’t encouraged to come back after having the baby

@TheyGrewUp Sorry what are you talking about saying no TV till 1974?
Presumably you mean lack of money and the same for a car.

My parents were born in the 1920s. They are older than your MIL. We had a TV in the early 1960s and a phone. They also had a very small, cheap car.

@ByTheSeas I'm stating a fact. Many people didn't have those things until later back then although I admit the ILs were a bit quirky. It wasn't about money although they'd have had others think it was.

MIL thought TVs were a negative thing that stopped dc from playing and reading (old fashioned teacher)
FIL didn't much like the telephone and never used it.
FIL onlyn learnt to drive when the bus route changed.

In the 60s it was fairly common for people not to have telephones, cars, tvs. I accept the ILs were outliers.

I thought you meant it was about money.

I was working (post-uni) at almost the time your in laws got their TV so I know what was going on then, as an adult.

@TheyGrewUp Both were common re: owning/not owning certain "mod cons" in the 60s because for cars, TVs and phones personal ownership was around 50% by the end of the decade (depending on the area growing from around 30%)

Any points about "not having an indoor loo" are actually the outliers as over 93% of houses had indoor bathrooms and loos by the start of the 60s this is a big jump up from the start of the 50s when only 50% had one - so some current older retirees may remember early childhood without an indoor loo, but by the time most of them were teens they would have had one.

Many people didn't have a TV at that time. We probably got our first around then, rented from Radio Rentals or Rumbelows. We couldn't afford a colour one, so we made do with black and white, complete with the obligatory coat hanger aerial.

We didn't have a car or a washing machine and neither did most of our neighbours.

Our "phone" was the urine-stained, often vandalised, red public phone box around the corner. Again, very few people had a home phone.

We thought people who had a colour TV, video players, atari games, owned a car and had a telephone were wealthy.

True poverty at that time often meant going without or making do with an inferior version: a coin-operated TV at extortionate rates, a black and white TV when colour was norm, or a manual TV when remote controls were the norm. No VHS player and no hiring films.

That was entirely normal back then Even then, we still had more than some. My parents (both working full time/overtime/additional jobs) like many millions were much poorer than your grandparents. So your point is?

We had a few friends with outside toilets well into the 1970s. Nobody batted an eyelid. It was becoming less common, but it certainly wasn't considered strange.

@NorthXNorthWest that may be your experience but it statistically was uncommon. That is the issue with threads like this. Statistically the current pensioners are the wealthiest ever, and the following generations are statistically never likely to see wealth on the same scale.

There are anomalies to the statistics, that doesn't mean the statistics are wrong, and you cannot create national long term fiscal policies on the anecdotes of outliers. I am a home owner, all my friends are home owners. That doesn't mean I think all or even most people my age are homeowners. Because I know that statistically 70% of people my age are not.

Current pensioners hold approximately 49% of the nation's total personal wealth,(statistically) with around 60%-90% (depending on the study) of their wealth in property. 80% of current pensioners are home owners, 15% are council tenants - that is 95% of a generation in secure housing. The average age the current pensioners bought their home was 24. Leaving ample years to pay off a mortgage and save and invest additional money.

Todays young people are less and less able to afford to buy property, and there certainly isn't enough social housing provision. So they will not be in the same position when they retire. So if we do end up old, freezing and hungry we (statistically) won't even have any assets (a home) to be able to downsize or exploit for equity release.

DH and I and DC1 moved from Scotland, (we had a council highrise with a nice bathroom there) to the North of England in the early 70s. We rented a terrace house for a couple of years, like all the neighbours’, the toilet was in the yard.

We did have a phone put in, a party line, so we could keep in touch with my mum who also had one, unlike DPIL.

When we moved to a small Shropshire village, in the early 70s, the tiny village school had outside loos. When we were using the girls’ loos, we could hear the boys in the adjoining loos trying to see who could pee furthest up the wall. 🤢

that may be your experience but it statistically was uncommon.

NTS 2024: Household car availability and trends in car trips - GOV.UK
Not an outlier

Tv Licences: Statistics - Hansard - UK Parliament
Not an outlier.

Lavatories - Hansard - UK Parliament
12% = 1 in 8, less common which I have already said, but still not unusual, especially in certain part of the country.

I am describing my first-hand experience, you are sharing a second hand perspective. It's perfectly possible for your grandparents' experience to have been different from mine and for both to be true. It isn't reasonable to claim theirs was the only norm.

IMO, statistics should be the start of the conversation, not the end of it. They are great for identifying broad trends, but they also fall short because they are an aggregation. They can't tell you how any individual, or even significant sections of that population, actually lived. That's exactly why statistics so open to misuse. Context is everything. A headline statistic may be factually correct, but without the right context it can paint a completely misleading picture. There's a reason the saying, "Lies, damned lies and statistics", exists.

Today's young people are less and less able to afford to buy property, and there certainly isn't enough social housing provision. So they will not be in the same position when they retire. So if we do end up old, freezing and hungry we (statistically) won't even have any assets (a home) to be able to downsize or exploit for equity release.

I have young people of my own, and I want them to have at least the same opportunities I've had and more. The problem with today's politics is the constant push towards a binary mindset because it makes it easier to justify poorly designed policies. Pensioners are portrayed as the undeserving, asset rich, "life of Riley" generation with their foot on the necks of poor young people, who are portrayed as the deserving victims. Real life is far more complex than that. Politicians should be focused on finding fair and proportionate solutions, not pitting one generation against another.

I see pensioners and young people as diverse individuals and subgroups, but all still very human. It's also interesting that, when you are talking about pensioners, aggregated statistics to describe one homogenous group are apparently enough to tell the whole life story. Yet, when talking about young people, we're suddenly encouraged to think about individual circumstances, lived experiences and the human impact of cold and hunger...

As for "exploiting equity release"... many equity release schemes have historically offered very poor value, with lenders often benefiting disproportionately. That's one of the reasons many people have avoided them. This morning there was a man on TV who said his mother had taken out an equity release loan of around £30,000 and, by the time she died, the lender ended up receiving the full value of the house, around £250k, as part of the repayment. They didn't even know she had taken equity release out. I haven't verified the details, but if it's true, they're consistent with many other stories about older schemes, where compound interest effectively stripped homeowners of most, or even all, of the equity in their homes.

We had outside loos at school. Absolutely freezing in the winter with tracing for paper toilet rolls. Ah the good old days of luxury!😂

@NorthXNorthWest
@SDTGisAnEvilWolefGenius

Me too, I was in primary school until 1976.
Freezing and that loo (sand) paper!

My nan did not have any indoor toilet or washing facilities until 1981 or 2.
They used the kitchen sink and I remember the tin bath hanging in the yard.

Honestly, there seems to be an attempt to rewrite the Seventies as some sort of utopia. It wasn't. There was plenty about life in the Seventies that, in terms of hardship and poverty, would leave much of today in the dust. Equally, there are problems today that many of us, including young people, never had to deal with. Why does everything have to become a competition between generations? Why is the only solution for one group to be sacrificed?