How can I help?

[bebeboeuf]

I am in my 30’s, work part time, have DP who earns just above average, we have a small house in expensive part of the country.
We have always struggled to keep heads above water and work hard to keep credit card debt low.

One of my parents has confided in me that they are feeling down and it’s due to money worries.

I don’t know the in’s and outs of their finances but I know that my parents were earning well into 6 figures for many years and have a mortgage free house that is with multiples of millions.

They are not yet at retirement age but have not worked for a few years now.

They don’t have holidays or eat out and generally live quite frugally.
They still have my younger siblings living with them who are young adults and contribute towards expenses.

I don’t know how I can help.

On one hand i could never imagine earning the money they have or being mortgage free. Money has always been something that hasn’t come easily to us, and in a way I feel that my parents have no idea how hard it is for people earning average salaries.

On the other hand, I can see how it might be hard when you’ve been used to not worrying about money and then have to live from savings only and can see this depleteing rapidly (more rapidly than I think they had hoped as the house is expensive to upkeep)

They obviously don’t want to sell the family house yet and that’s understandable, but I do think that if they had actual serious money worries that people do every day that they could always downsize.

I’ve tried to reassure as best as I can that there is nothing to worry about and even if money was a serious concern that we as their children would obviously support them as they have done for us.

How else can I help?

You could offer your mum a money-ideas swap day. Making it mutual and calling on your mum’s years of experience, stops it sounding like you are prying or being bossy.

I did this with my mum after my dad died. She came up with food and house-related economies and I discovered she was being fleeced on car, home and travel insurance. She was paying twice what I was for the same breakdown cover, and her phone contract & broadband were eye watering.

We did it annually after that.

I think you will have to gently encourage them to downsize to release equity. Or an equity release scheme (although these have a whiff of scam to me). It doesn't sound like you can afford to support them financially at all.

Seniorschoolmum's idea is fab.
There might be loads of things they're paying over the odds for - utilities, broadband, sky TV, mobile phones, direct debit to charities etc.

I'm sure they wouldn't want any financial help from you, even if you could afford it. Luckily they've got a major asset there that they can use. Like pps have said, either equity release as a last resort, sell up and downsize, or get a mortgage on the house.

It sounds as though the key thing is when they can access their pensions. I'm assuming they do have pensions given their former earnings. If they can access them now (as i think you can at 55+), even if reduced then that might be a way forward. The other obvious option is to downsize and release equity and for your siblings to move into their own places. It does seem silly to be spending a lot on house upkeep and bills if they are struggling financially.

Thanks for the good ideas.

I think the main way to cut back is the house itself. The electric and gas bill alone are way over my mortgage payment.

Luckily, other than the extravagant house they are very reserved in spending.

I don’t think they would get a mortgage now due to their age.

I am unaware of their pension status. I think it might just be savings and the house which might be why there are worries.

If they have a house worth millions whist scrimping on food, then they're mentally unwell frankly. I think I'd point this out sharpish.

To be fair to them they eat and drink very well. They have cut back from regular M&S and Waitrose weekly shops and swapped to Aldi with the odd treats from Waitrose and they seem excited by how much they ‘save’ on food now despite enjoying plenty of decent food.

I asked a bit more detail as to the worries and it seems there are a few specific areas of work the house needs money spending on it.
My mother is talking to me in confidence and has asked me not to mention any of this to my father.
He’s very proud and wouldn’t want anyone worrying.

It’s a shame as the two areas of the house that need work I could potentially help with as I’m in construction industry but i would have to put forward any suggestions carefully so that it wasn’t taken in the wrong way.

To be honest I think your mother is massively taking the piss by moaning about money troubles when they are sat on millions in equity. They have choices and options and she shouldn’t be making you feel like you need to help when you clearly have far less wealth. Given their income levels, I’d be surprised if they didn’t have good pensions as well.

They need to downsize. Stop listening to their money moans the answer is obvious.

If their house is worth millions and they earned 6 figures for years they would be awful to take money from you and your family. Awful. Look after your children. Don't give what little you have to your wealthy parents.

It's my belief that each generation is here to help and support the young - their children and dgc. Not the other way round and certainly not if the old people aren't actually in need. If they are homeless on the street or hungry, obviously that's different. (We bought a house with an annex and took my dsf in for eight years, but he was desperate).

I agree with user
You have your own finances to worry about.
They haven’t worked for years but aren’t due for retirement, can they get back into paid employment?

You could help by strongly advising them to downsize. It sounds like they could release a huge sum and move into a property that would be more suited to their later years - a bungalow or spacious flat in a nice serviced building with lifts etc. They could then use the money released to boost their income over the rest of their lives.

The alternative would be a lifetime mortgage to release equity, but they are generally expensive for the help they provide, especially if they are not yet retired.

Also introduce them to the moneysavingexpert money make over to systematically review all aspects of their finances to see what they can do to improve their situation.

Do the younger siblings pay their way? Is the contribution a meaningful amount, or is it just a token offering? Are your parents actually getting near dire straits money wise, or are they panicking because their savings appear to be running out?

Some older people who've saved hard for years are often reluctant to dip into their capital, even when it would be a good idea to do so - ie they need the money and if they spend it in a controlled fashion there is enough to last them the rest of their lives. People are often reluctant to spend because they are focussed on leaving a substantial inheritence, when they would be better offer using it to cover their immediate needs.