Property or cash?

[BeAzureAnt]

Hi all. Seeking some advice here. We have a paid off house worth ca 400K and about 625K in the bank (NS&I direct saver), and 225K in private pensions. We'll also get UK state pensions and I'll get another 14K a year in workplace pensions. Husband is 60, I am 59. He plans to work another 3-4 years at 45K a year, and I am retired. No debts, no children/relatives to leave bequests to, and our estate will be left to charity. We live on about 25K a year for the two of us. We live off interest, some of DH's salary and bank the rest.

The house we are in is nice...we did it up and it suits us all right, but we saw a much nicer house for sale that would cost 675K...basically our savings and little more. It is slightly bigger but has a much larger garden and in a better area, and the house itself is so much nicer in terms of decor, layout and features.

I'm wondering if it would be better to buy the nicer house, or just stay put so we have enough for private care later and be grateful for what we have. I really like the house, but am getting cold feet about the loss of our savings. We are not great travellers, nor go on cruises, nor have fancy cars or expensive hobbies. Husband would like to buy a used electric car in the next couple years, as his car is about 10 years old. Thanks for any thoughts.

Like you I have had a frugal life and have now got to an age where I am wondering what I an saving for. I think as you are financially stable it is time to start spending some of those savings on something you really love. A nice property is a better investment than an NS&I savings account but do get some of that money into investment ISAs or at least cash ISAs so you don't have to pay tax. PS Your husband sounds like a treasure so please find something he would really love to do as a thank you.

Aww. Thank you. DH is a treasure no doubt. He really likes the acreage around the house, and is very enthusiastic. I think we’ll both enjoy it.

Made up for you OP.
We have less than you but we are planning a similar move. It's exciting but stressful too.

You sound like you want to buy this house so why not? You are retired, you spend a great deal of time at home so why not? I would suggest you invest some of that NS and I money as rates have just dropped again. You could be getting 6-9% on it with investment. You sound quite matter of fact about your life. This should be an exciting time for you. Everyone likes different things I know. I'm 10 years older than you and travel long haul twice a year to warmer climes. In addition to that we visit family elsewhere in the UK and do some short haul city breaks. I buy what I want whether it is food or clothes. You are never going to be younger than you are today.

Personally I’ve had a lot better return on property than on any other kind of investment, so far. I’d go property all the way

Oops I just saw you are going for it! Enjoy!

Thanks. Well after all that, we had to pull out. The survey given to us today revealed a massive money pit…new septic is required as old one is illegal, total rewire which involves redecoration because the wires are in the plaster which is wallpapered over, new boiler is necessary, and windows which need to be replaced a lot sooner that we were led to believe. The barns are in a dangerous state, not just dilapidation, so insurance would be higher.

It did make me think though about what might be nice to have during retirement, so I suppose I’ll forget about a house for now, keep the cash (we are now figuring out the best legal ways to shelter it from too much tax paid on interest) and carry on as before.

I’m writing an email to the estate agent to reach them after Boxing Day. No use spoiling their Christmas.

Thanks. Yes, we are seeing our financial adviser…it is a little tricky because I am a dual national with the USA, so there are Byzantine tax implications. We may put a portion of it into DH’s pension.

I am quite matter of fact, you are correct. It is the first time I’ve been faced with the question what I would like to do, rather than what I have to do to meet obligations to family, employers, friends, colleagues, charities I’ve volunteered for. I’ve always had long lists of things I was expected to do for others. DH is happy enough where we are, he likes his job, and he likes where we live because he can ramble far distances. I take shorter walks with him and I can garden which is fine, but I’ve kind of gone along with what he wanted simply because my job was so demanding on my time, and I didn’t have the energy to think about it much. I thought a small holding would be good fun, but it that doesn’t happen, well, I’m not sure really. Time to think a bit. If we don’t spend it, it goes to a good cause, so it is OK.

Thanks to all for comments, and Merry Christmas.

Have received a notification you are posting again. Just wanted to come back on whilst my parent/step-parent/MIL in their 80s/90s are making me pull my last hair out! You posted in investments, I don’t think this is an investment question. A home is a home not an investment. Obviously your money will grow well in various strategies, tax efficient or not but your question was, can I now have the dream home rather than the sensible home and my response yet again is you can have whatever you want! Maybe not this house, maybe the next one, maybe something else. Just please give yourself permission to spend your own money. Saving is for a purpose not just for the point of it, and although I admire your thought that when it happens you can leave it to good causes is admirable, why on earth did you do without if it wasn’t for the future you’re currently in. Please spend your own money on whatever makes your heart sing.
merry Christmas to you too

I hope this email does not find you bald. :-)

Thanks for your post and the reminder. You are right. I just have to figure out what makes my heart go a flutter. Been a long time since I considered that question. You have a lovely holiday @Neededa

You are not spendthrifts and can easily afford to live on your pensions. So long as there are no known unknowns, I would be moving if I were in your shoes.

You can always move again, and your risk-money is the SDLT cost of buying two properties.