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

That’s all well and good but if you have to sell then you have to sell. It’s called reality. You don’t get special dispensation for being older.

Could you live on £1000 per month?

I’m with you OP but it very much depends on what the house is worth - it’s easy here in the south to forget that a £450k semi here might only be £180k back in my original home town - otherwise post 75 I say it’s far preferable to living in misery if you don’t want to move.
equity release comes in many ways these days - including drawing down an income - here’s an example below based on 15 years drawing £400 a month ( which could make all the difference to a lady like this) - now if your house is worth £250k plus - if this was my mother I would want her to do it - I think the reason many don’t is the fear of care bills but to be frank unless you’ve got a hefty asset or zillions in the bank - as things stand it’s going to be an issue for vast amounts of the population- so I would rather work on the ‘now’

If you drew £400 a month for 15 years through an equity release drawdown lifetime mortgage starting at age 77, your total debt at age 92 would be between £120,121 and £125,145, assuming typical 2026 fixed interest rates of 6.5% to 7.0% AER. 1, 2]
Over the 15-year period, you will have personally received a total of £72,000 in cash, meaning the compounding interest "cost" rolled up on top of your loan will total £48,121 to £53,145.

She could sell and downside but nooooo her 'memoriessssssssssss' with a wail

I agree. The whole concept of 'memories' about a house is utterly bizarre and even worse when people are hanging onto said house that they can't afford to live in and/or can't manage because of this.

Well you're a charmer. 😶

Equity release is a con.

Thank you!

Not quite as small as you think and for someone who's worked their whole life a whopping £3 per week more than someone on pension credit who hasn't.

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They also have a benefits helpline

That was true for my mum too. Wouldn't have her lights or heating on. Didn't eat properly. Would get a taxi to make shopping easier, wouldn't hire a cleaner or gardeners. I guess she was keeping it just in case in her mind

Iceland shoppers

https://www.mirror.co.uk/money/iceland-launches-new-service-help-37245992

I have a 7 bedroom hous and if love to downsize to a 4 bedroom but DH won't hear of it. He has a large double garage and large garden and he sadly won't give up those. My adult DC have even offered to go through the garages and his shed and help him to move it all but DH is very stubborn and says he likes our home and doesn't want to move.

Are you struggling to eat and heat?

Yes
I wouldn’t want to (and won’t have to because we are not leaving retirement in the hands of just the state) but I could.

Anyone can if they have a fully paid off house that isn’t too big for one person.

Yes it might be harder (with council tax) if it was a 4 bed detached, but the state pension is calculated on what one person needs not what they want.

And if I was heading towards pension age with only the state pension as an option I would put myself on a housing and transport situation in good time to accommodate that.

Not get in that position and whinge to BBC reporters that I deserve more more more for me me me

And all what you say is fine.
However they should not be entitled to any benefits above the pension if they have money (equity) that they don’t want to dip into.
It’s no different to having a £100k ISA and saying you don’t want to start cashing it in.

Equity Release comes with lifetime tenancy, no one is getting kicked out of their house.

We’re not worried about inheritance, our DC don’t need it, but affordability and security. Our home isn’t valuable, we had a similar income to lots of social housing tenants, (I worked in that field) but chose to buy. In supported retirement accommodation, we could afford to self fund the rent, and pay for other care without recourse to benefits. That would, IMO, be putting our only asset to good use and not be a drain on tax payers.

We live relatively comfortably on two pensions, no fantastic holidays or new cars, also no means tested benefits, but we’re stuck. We don’t live near any of our DC or other family, and want to remain as independent as possible. I guess lots of owners of relatively inexpensive homes are in the same situation.

Explain how it’s a con?

Absolutely this. I do think the (previously very generous) welfare state has created such a sense of entitlement that it’s ridiculous. So many people want to outsource all sense of personal responsibility onto the state and live their lives in a perpetual state of infantilisation.

Thread after thread after thread on here with posters refusing to take any responsibility for themselves or their own choices and wanting benefit after benefit and bailouts from charities and the government. Leave those for the people who really need it, not because you failed to plan for your retirement while living through the most stable, secure and financially beneficial period of time this country has ever seen.

Hi there, thanks for your thought provoking response, Hope you don't mind me querying what you mean by "the vast amounts of pension provision" Do you mean the actual state pension, I am sure you are aware that people can only claim the full state pension if they have at least 35 years of NI contributions.Are there too many pensioners in your opinion? I do know that in my own parents' case my dad died before he was eligible for his state pension and my mum only lived for two years after she retired,maybe we are all living too long. May I also ask where the rhetoric of "poor pensioners" is coming from, I do not see it on any of the news sites or social media that I use, in fact I see much more of your opinion suggesting that most retired people are well off both in terms of money and assets. I'm not well off nor are the older people where I live as it is a poor area If one goes to a wealthier area then I assume there are wealthier pensioners there just as there will be better off people in general Yes, I own my house but believe you me I struggled as a single parent to pay for it, had to do two jobs sometimes but it gave my child a good work ethic. Yes there are some whinging, unpleasant older people but I do not doubt this is applicable to younger people too. Personally I think that every generation works hard and faces struggles and challenges, I think that young people today a very tough time as the housing market is broken and AI is already having a negative impact on entry level jobs. I think student debt is horrifying , climate change is a huge concern and even though I am an old git I want to see a better world for the next generation.

This is how I feel about it - I think a lot of people are thinking of how it was -when someone drew down £70k at 64 , spent it and ended up owing £250k at 90 . It doesn’t have to be like this, it can be drawn down as income gradually - so an extra £5k a year as per my example below and shouldn’t in my opinion be done before early to mid 70s - or it can be a hybrid - draw £25k for home repairs/upgrade if needed and then small monthly amounts -that way you are only paying interest on what’s drawn - there are other options too for those who have quite good income but want money for home or to give family help including paying your interest, so what is owed is what you’ve drawn - I think there’s a lot of people out there who've mentally spent the inheritance they expect and would be quite happy to have parents struggle .no one’s home is at risk on these arrangements. Yes downsizing is sensible for some if willing, but plenty aren’t exactly living in mansions now - and are quite happy where they are, just could do with a bit more income -

We bought this lump of a house when we had to care for mum and step dad, mum has finally passed and now just the two of us in our 60's in a five bedroom, 3 bathroom home with huge gardens - in the middle of the back of beyond

Its screaming out for a family

I would love to downsize and move closer to amenities but the truth is, we would need more then what we would get for this because big houses in the country with no amenities , go for a lot less then a bungalow close to town where there is gas, and buses and trains

Luckily its a chalet bungalow and we are now in the midst of moving to ground floor living

We are nearly at state pension age and only work part time , but keeping the house in good order is a full time job which whilst we are still both fit we can manage ourselves, and that's my biggest worry , getting to old/infirm to do so and having to pay people to come in

We will have a frugal retirement but we will manage. We have lived through very lean times and these past few years, with the COLC really hitting us and my earnings are now bare minimum , we are kind of used to making do and mending

In a way we will be better off as pensioners, if we stay fit. Illness - that worries me

We had friends ( both passed now ) who had a beautiful house in Worcester Park and they took ER and helped their daughter and had a great life. They both passed early so their daughter still inherited something, plus had benefitted from the ER - I think the house went for close on a million

Having read the Reddit thread from the link posted above, I now think Elaine is a troll used widely in the media to get people frothing and clicking on the news websites... 😂

Yes, every generation works hard. However, not every generation has been equally rewarded for that hard work. And today’s pensioners seem to be unable to accept that fact. They have already been rewarded vastly beyond what any generation before or since will ever get (so my comments aren’t ageist, they are about this specific cohort of pensioners), and yet they are still constantly wanting more.

The rhetoric absolutely is there, as well you know. This thread was started as a result of yet another article about yet another “poor” pensioner after all.

Exactly. Equity release used to be seen as an option if you wanted to go on extra cruises or buy a camper van or give your children a house deposit. There is a big difference between taking out a lump sum for those things and using it to supplement your income.

But the focus is always on inheritance, isn’t it? I think that’s also why so many people don’t want their parents to buy retirement flats: it eats into their profits.

I agree! Apparently in an article 2 years ago she claimed she couldn't afford a car - now she has one and spends 50pw on fuel? It doesn't make sense.