What would you do?

[talkingcashstuff]

If you were 52 couldn’t work due to health, 80K left on mortgage on a too small not disability friendly house, tiny 15K pension pot but 40K in savings.
Hubby self employed virtually no pension (10K pot)
I don’t know whether to invest some of the 40K (wouldn’t know where to start) pay some off mortgage, put some in pension or try to move to a bungalow which is what I need but then there’s not much left to fall back on.
I’m not sure what to prioritise, I need an accessible house but don’t think we can borrow more and don’t really want to borrow more anyway.
the 40K is currently in savings account which is 4.5%
Any ideas financial geniuses?

Often a bungalow costs more than a house; if your priority is an accessible home then maybe look at shared ownership and pay partial rent? Only you know what’s available near you and your attitude to ownership or renting property.
At 55 you’d be able to move to a retirement complex but it may not suit you as a couple. I’d see if there’s any advice you could get from Age UK. .

I'm not trying to be mean but your pension if you mean £15k in total rather than £15k per annum is so small it will give you peanuts each year. You can take 25 percent of it in cash once you are ATM 55 but STB 57. I might be tempted in your position to not pay more in pension as you might be able to get Pension Credit if your pension is very low, as its means tested and you can still get it if you own a house. If you could get that you'd get free council tax too and WFP. I'd pay the £30k off of your mortgage because you'll save so much in interest payments. I'd also try to overpay, to pay down your mortgage. If you can clear it off it would be easier to move in maybe 10 years. I'd focus on repaying mortgage early rather than pension now as you're more or less starting from scratch with pension. Have you got full stamps for state pension? If not definitely focus on getting those.

I wouldn't pay a lump off the mortgage,your savings are currently earning about the same, or even a higher rate, so there wouldn't be a saving in interest.

I also agree that there might be little benefit in increasing your pension pots and it sounds like you can't afford it anyway.

Are you entitled to benefits if you can't work? PIP? You don't say what your current budget looks like in terms of affordability - income vs expenses. Does your DH earn a decent amount from his self employment? Or would he earn more as an employee, which would give him a pension and other benefits like paid leave?

On the pension front, it depends exactly how old you are as to when you can start taking money out of your pension - if you're closer to 53, rather than you've only just turned 52, it's 55 in the former case, but jumps to 57 in the latter so it could either be in just over 2 years time or 5, which looks quite different.

How much is your current home worth and is it likely to be affordable to buy a bungalow - eg if you're in an expensive area so can move to a slightly cheaper area where a bungalow would cost less than your current home so you could reduce/pay off your mortgage?

If not, shared ownership could be an option - possibly a new build as they are more accessible than older properties - would a modern standard small house with accessible entrance, downstairs bathroom and stairlift suit?

The other option could be to stay where you are and use your money to adapt your property - downstairs bathroom? Stairlift? Or to replace your income - run down the £40k gradually to fill the gap in your budget, rather than paying a lump off your mortgage?

I wouldn’t touch shared ownership with a barge pole https://podcasts.apple.com/gb/podcast/merryn-talks-money/id1654809850?i=1000703546451

When are you on track to pay off the mortgage by?

How much more would a bungalow cost?

Don’t despair about the pensions. With a bit of growth they could be £50k by the the time you retire, more if you can both add a bit extra. Assuming you have two state pensions the extra money from the private pension could be the difference between a few treats and a buffer in case of problems and none at all. Well worth having.

Moving is expensive, would it be reasonable to spend some savings on making your current home more accessible? Could you convert the garage? Extend with a bedroom and wet room? You could call an architect for an initial consultation and work out what may be possible. Additionally could you work from home to boost your savings? Contact Citizens advice to see if you are entitled to any benefits.

Have you had an assessment by an OT on your current house? It may be better to look at how to make that more suitable, for example install a chair lift or downstair bathroom etc.

If a bungalow would be more expensive than your current property, would a ground floor flat work?
Can you do any work at all (including from a computer and 100% home based, maybe part time) or do your health issues preclude that? As there isn’t really a magic way to make £40k stretch hugely further and it is quite a long time until state pension age. Are you entitled to benefits if unable to work?