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

There are reasons that older people leave it and leave it before thinking of moving and then come up with a raft of excuses as to why they wont.

I get that its a big unheaveal but dont go on national media bleating that
you cannot afford to turn the oven on. Your asset is literally in front of you.

There is someone up thread saying that it will cost them £30k in Stamp Duty. There is always always an excuse. I had to literally pin my elderly Mum down to move to a retirement flat. She claimed that she was fine living on her own miles from me. I ran her life admin but she called a lot, everything was a massive drama for her and needed to be done urgently because she worried and worried about things.

She would tell people she lived quite happily on her own but the house wasnt being maintained properly. The hot water didnt work properly either but she kept that all hidden from me.

What do people spend it on ? Mainly as an opportunity to get on the housing ladder, so the fact houses are treated inequitably in terms of taxation and counting towards benefits actually pushes their price up further and stops people getting them without an inheritance. Nicely circular.

Your opinion that you would ER is absolutely fine, just as someone else has a different objective to maximise their estate. There is no wrong or right in this IMO.

The government shouldn't be bailing out the "poverty stricken" with £2 million assets though.

Maybe there needs to be some sort of state sanctioned equity release scheme to attempt to clear up the reputation of this.

Some people would argue this is already in place re care home fees. However the government tends to not get involved with stuff like this due to the popularity hit it takes when things go tits up due to peoples poor planning. Hence banks.

Many pensioners grew up knowing they were one step away from the workhouse, (abolished in 1930)

So you'd have to be at least 110 to even remember that then...so no, not many pensioners at all.

Quite. all this talk about workhouses. What a load of cobblers!

There was an article in the Money section of last Saturday's Daily Telegraph that sets out the pitfalls in some detail.

I would only consider it as the ultimate last resort.

I think of you literally can’t afford to eat, you’ve reached the option of last resort.

I'm I missing something with this story? Nothing seems suggests she owns a house she could downsize from?

I said those influenced the older generation, my grandmother was born in 1928, another grandfather was born in 1893, these people influenced their children's and grandchildren's attitude to money. Is this really so difficult to understand for all you highly educated left leaning women?

Equity release should only be an absolutely last resort in a really desperate situation.

Also remember that many older people don’t actually realise what kind of asset they have

they often ( I have seen it ) can’t accept their house is worth what people say

and they are often partly right that the state of their home affects its value especially if it’s not been touched in years - they usually way underestimate its value

Don’t think you get means tested benefits if you have the full state pension.

No need to try and smear left leaning people as ignorant and unsympathetic and unimaginative- the cheap nasty jibe really undoes any point you are trying to make

yours truely
left leaning

Maybe they think they will need it for a care home!

It’s like listening to a bunch of fourteen year olds talking about adults. They are so sure they know all there is to know.
if you were discussing the plight of refugees they’d be quick to admit they can’t know what it’s like for those people.
Agism is like air or electricity.. they literally have no idea they are being agist, it’s invisible to them that they are talking about older people with patriarchal contempt.

There's often more to it. My mother and step live in a four bed home, fortunately a chalet bungalow, worth about £750k. A few years ago they'd had it valued and were set to downsize to a smaller two bed bungalow to make their lives easier. They were both fit and well in their 80s. Then mother's heart condition hit, then the parkinsons and mi or strokes. Step developed vascular disease. Frailty was swift and moving as swiftly off the cards. They wouldn't cope now with a move, mother can barely remember where the downstairs bog is, post a renovation twelve years ago.

Fortunately, money isn't an issue and gardeners are organised and I can visit weekly.

I agree with other posters that equity release is not a good idea.

She does have options available to her however that many don't.

She could take in a lodger.

She could sell and downsize.

She could sell and rent.

If it's not practical or feasible to find her own home, then if she has family, she could move in with family and rent the house out or sell it. (Yes, I know the general reaction on here to a parent or in law moving in is one of horror, but I'd rather live with my mum and have her drive me insane than have her living in a cold house going hungry because she can't find anywhere else to live).

Or if she has family, she could ask them for help paying the bills.

If you own an asset, there is absolutely no point sitting on it and starving yourself, making the last few years of your life miserable. You can't take it with you.

Fortunately, money isn't an issue

But it is in the case in the OP.

I agree that it's much harder for elderly people to move than it is for others.

It's not insurmountable though, and if the alternative is to stay where you are and be completely miserable because you can't afford to cook food, then the choice is a simple one.

We looked into care homes for my MIL. The price was truly shocking. I don't think people understand how expensive it is until you start looking.

Im really interested to know where you live that a 5-bed house costs just 80k more than a 1-bed flat?

Equity release broker fees are high and you normally need to pay them before you get the lump sum.

It's not the worst scheme in the world. You cannot be evicted due to non-payment as you can choose not to pay anything while you are alive, but if the roof falls in and you don't fix it or you fail to insure it or pay council tax then there are consequences.

I think I would be tempted but only if I lived alone with nobody to leave my home to.

I take that story with a pinch of salt.
If you read the details (and she's been featured in many other media features over the years) it's maybe not all it seems.

There is info on her around which suggests she is not so poor as she makes out- she should have the state pension, pension credit is she qualifies which will then include lots of other benefits, and some of her late H's army pension.

She's spending £50 a week on fuel for her car.
How does she need to spend that much or do so many journeys for herself?

My mum is in her 90s and lives on the state pension and a little bit more from my late dad's pension. She eats well, doesn't drive, buys clothes, etc.
She is not rich and never has been. her council tax is close to £2K pa and her utility bills are around £2K. But she manages pretty well.

Going back to the question, equity release is not always wise and you lose money.

But its an asset they (owner) can use to raise money for them NOW not to leave behind.

I don't know how old this person is but moving g in later years is extremely stressful. Some may not be capable of sorting out all paperwork involved with selling. Some may not be able to physically pack up a lifetime of things to move to a much smaller property. Some may fear uncertainty of renting. Many may have made friendships and local support network and be afraid to lose that if theyove away. It's different if the person has close family who can do a lot of this on their behalf.

She's 77. It's on the BBC news online.

Options that may seem difficult are still options. My parents sold up their family home for a flat, not particularly to save money but because the house, garden etc was becoming too much. I find it hard to muster up sympathy for someone who has options but doesn’t want to take any of them. Which is fine but put up with the consequences of your choice without moaning.