anyone thinking of buying a Mccarthey stone retirement flat DONT

[Isseywith3witchycats]

3 years ago my MIL died and to date trying to sell her flat in Braintree has been an absolute nightmare, 1st buyer found a cheaper one, second buyer pulled out on exchange day current buyer has been waiting for paperwork to come from them which has taken forever just about to go to exchanging paperwork and they have now said prospective buyer can not buy it as she is 58 years old this flat was bought 15 years ago for £147000 and even at £105000 which was what we accepted still cannot seem to sell it, thing is in the complex its in its one of the best ones large due to being on a corner and ground floor so direct access to the gardens and have had a brand new boiler put in and over the three years it has cost service charges so god knows what we are going to do when whats left of the estate money has gone 7 heirs so each heir wont get a massive amount of money

They’re only going to hand over 40% of anything over £1 million for both parents’ estates. In the case of someone I know, her kids will get half of £1.35 million (three estates, including that of a single aunt) and 60% of the rest. Thanks to London property prices and three properties (their grandparents’ house has been rented to tenants for several years), they’ll probably be looking at a minimum of £1.5 million each after inheritance tax. They’re far from alone.

Not really given care fees, also normally children can’t inherit final salary pensions. Or you know the children inherit one of these flats, can’t sell it and the estate is eaten up in service charges.

The IHT limit is £325k plus £125k property allowance, it’s only nearer £1mil of one parent inherited from the other before handing down to children, and given the number of divorces these days that’s becoming less likely. You can try to spin it anyway you want but overall generations are now getting poorer except for the top % and so these “luxury” apartments will be unaffordable for more people becoming pensioners.

The people in your circle are not the norm by any stretch.

The care for someone with dementia which is very common who has savings can easily be £500k then you have IHT on what's left. This is why the government has kicked the social care limit of £90k into the long grass, the cost could be enormous. Private social care costs are a form of inheritance tax in a way.

I think the real point is whether this was a good idea for the MIL.
As long as living in one of these flats worked for her that’s the main thing. I would hate it if my Mum chose her living arrangements based on how easy it would be for me to inherit once she was gone

It may not be the norm but it’s much more common than you might think.

There really should be a way for pensioners not in the social care system to be able move into smaller/more suitable accommodation for their last 10 years or so without having to leave a property albatross and a load of debt in their legacy.

Yep, I agree with you @Flapjackquack and that was kind of my point @JackandVera ! 🙄

Well there are all kinds of things you can do - trusts etc.

Of course children can inherit final salary pensions. I had half of my ex H's and that will go to my son tax free until he draws it.

Agree.

of course it depends on the scheme and whether you stick with it or move it elsewhere.

It may not be the norm but it’s much more common than you might think.

I'd really like to know the figures that support this. It may be more common in London and the southeast where property prices are higher than the rest of the country in the main, but I doubt it elsewhere.

Of course children can inherit final salary pensions. I had half of my ex H's and that will go to my son tax free until he draws it.

I had no idea of this. Does that mean that my (small but valuable) final salary pension can be inherited by my kids? I was sure it ended with my death.

Final salary pensions can't usually be passed on to non-dependent children.

JackAndVera may be thinking of defined contribution pensions where the individual builds up a personal 'pot' that can be left to others if unused.

@NotDavidTennant - I couldn’t be bothered to go into it anymore but I agree with you. I have never seen a final salary pension go anywhere but a spouse.

@sunshinesupermum - I agree, even in the SE care fees eat things up pretty quickly. Nursing homes are around £1,500 a week minimum self funded here. The money doesn’t go far.

The vast majority of people die without needing to go into care homes though.

I realise it is a massive financial burden for those that do but it is still a fact that most people don't.

Although the million+ figures for inheritance are only going to be smaller numbers, it is indisputable that FAR more of the generation now in the 80 - 100 age bracket own their own homes than their parents, or any generation before them did, and also a fact that if they bought their property anytime before 1980ish, it is likely to have increased in value at a rate never seen before too. So whereas I would question the amounts (taken across the country as a whole), I agree with the point about more people now inheriting than probably at any time in our history.

Obviously it’s London and the SE. That’s where insane house prices have made some people very wealthy - when their assets are liquidated.

Glad that's clear Blossomtoes

It was never unclear.

It depends on your scheme. You need to find out and also to see if not then if you can transfer some of it.

Tbh from what you wrote can’t see how it’s Mcarthy stone fault
someone bought a cheaper one.
someone changed there mind
someone didn’t realise there for over 60’s

No I am not. I can assure you that my ex H's was a final salary pension. We got divorced and I received 50% of that in pension equity (which is invested and providing me with an income ) which is heritable without inheritance tax. It is going to my sons. If we had remained married I would have got a widow's pension which would have finished with me unless we had given up the "pension for life" and taken a CETV to transfer the pension. In this way again it becomes yours and yours to pass on to whoever you want.

So you transferred value out of the pension and your children will inherit the transferred underlying assets. They certainly will not get the amount your ex would have got in perpetuity if he hadn’t got divorced. It’s not the same as just inheriting a final salary pension. It’s will be like a contributions based pension. Once the assets are used up the payments will stop.

The original point was that future generations of retirees are not going to have pensions that are anywhere near as generous as the final salary pensions that many retirees have today. Regardless of whether or not it's possible to transfer funds out of a final salary, that observation is likely to be accurate.

I'm in a defined benefit scheme and it changed from final salary to career average salary years ago, so much less generous for current generations of workers than it was for the current generation of retirees.

I'm not convinced any of thus makes a massive difference to the sale of retirement properties in the short to medium term.