At what point is it sensible to spend minimal savings and be on benefits

[backatchababy]

So my MIL is struggling on a small pension barely leaving her with enough to live on. She has £30k in savings which gives her a £75pm top-up which definitely helps but is preventing her from accessing any sort of pension credit. She hasn’t had a holiday in decades and I’m thinking she might be better off spending her money for the next couple of years whilst she’s still fit & well ish then claiming benefits. Turn2Us suggests she would be entitled to £1,400 extra (pension credit, council tax and something towards her rent) if she didn’t have so much in savings which would be life changing for her.
I’m aware of deprivation of assets so she’d need to be sensible and careful but surely spending some money on some new furniture, a holiday and small gifts for a few years is acceptable? Anyone know about this or where she could get reliable advice as to whether this is indeed a sensible route to go down or too risky. We couldn’t care less if she has no money to pass on to DH or his siblings (although they may feel differently)

Are you seriously claiming that buying new - needed - furniture is wildly extravagant? You strange, strange person.

If she would get £1400 extra per month in benefits without the savings why doesn't she take an extra £1400 out of her savings to live on? Presumably DWP have calculated that that's the minimum she can reasonably live on.

Absolutely. Why do so many people feel mean towards older folk. It will be you one day. After all youve done/contributed to society, some thoughtful respect should be called for .....

I'd forgotten about this so back with an update. MIL has now increased her income by £350 a month and so much happier. We suggested a review in 6 months and she can always increase/decrease if it's not right. This has been a massive step getting her to agree to take anything out & accept we're not fussed about inheritance but she definitely wouldn't take (or indeed need) the £1,400 benefits would provide her - not convinced that's right anyway as it's a massive jump from £0 to £1,400 on top of state pension.

PLUS she has agreed to go on a holiday so in the new year will be drawing down a lump sum of £2,500 to pay for a spring holiday and the furniture bits she needs. Our very crude calculations suggest her money will run out completey in about 8 years assuming modest growth on her investment and no further lump sums taken. Assuming she's still with us in 4/5 years she can then apply for state help and I for one won't begrudge her a single penny.

Not really applicable if renting as OPs opening post said - depends I guess on what kind of rental

Good for her OP, that’s what savings are for. I hope she enjoys her holiday.

Not sure whether it’s been mentioned so far but we’ve been through this with MIL 88 recently - she fell at home in October resulting in a hospital stay and was discharged with a nasty leg wound that will take several months to heal with district nurse support every other day. She was provided with an initial ‘bargain basement’ care package to help with getting up in the morning and bedtimes. This was funded for the first six weeks by the local authority (primarily to ensure swift discharge from hospital). The carers did their best but the timings were a challenge (get up after 9am with bedtime at 7pm) and they made little effort to interact with her. Now that the six weeks has expired she’s ended up funding private carers who can offer her preferred times and also more conversation (she likes to chat especially as she can no longer go out to socialise due to her injury). We discovered that she has £30k savings that will fund the care package for the next year or so before she’s reduced the balance and is eligible to apply for local authority support again. And that’s after using her attendance allowance that she’d previously been awarded (before she fell she was reluctant to consider having carer support). On balance it’s good that she does have a financial buffer because the local authority funded support post discharge was very basic.

@backatchababy a wise move, if you don’t own your home and haven’t got significant sums stashed away then the ‘can’t pay for the best care home ‘ kind of becomes irrelevant - always best to have £10 to£15k though for emergency help/ care/ taxis etc - I believe if over pension age you can have£10k before deductions for savings are applied on UC and the total cut off is higher too - maybe £20k? So check that out - she might be able to get some help sooner than you think and no I don’t think anyone will quibble at taking out £350 a month for income , especially if she has rent to pay still

Yes @Crikeyalmightywe would encourage her to apply for help ina few years when she is the point of eligibility. The amounts could well have changed by then so no point worrying about exact sums but no, we wouldn’t want her to be left penniless in case there is some support or help she might need (or she just wants to treat herself) Her house is a 1 bed over 60’s flat so is fully future proofed already thankfully and they completely renovated when they moved in about 15 years ago (yes, using their money in a rental but they have a lifetime tenancy and had money from the sale of their property they couldn’t resist spending!)

@backatchababy if I find myself on my own at any point I intend to do something similar - an awful lot of elderly people would be far better off with rentals with lifetime tenancies if they can find them than buying over priced new developments which quickly lose huge amounts of value in most cases -problem is a lot of people do want the fancy stuff and nice kitchens and a lot of the ‘not new ‘ developments can be a but more basic - but myself I would rather pay out £10k prettying it up than losing£200k - if I had lifetime tenancy.

@backatchababy good luck to her anyway and hope she has a fantastic holiday!!