Do you have savings?

M0nica, "She can afford to pay for any care she may need herself" I think this may be a bit to the fundamental question, or it is what I hear. When does divesting assets for lowering liability to estate tax make an equilibrium with keeping enough assets to live an indeterminate rest of life?

I know my answer is to spend not save, but I do have a husband to shoulder that worry and hold my spending back a bit.

M0nica, very interesting, that. We do spend liberally to reduce our potential liability for inheritance tax. We did give to our daughters at an age when we could and did reasonably hope to live seven more years. But, if that giving was eaten up by interest I do not see the point. My maths are always awful, I question the interest bit. Please explain.

She pays the interest on the mortgage so that that is not mounting up and her nieces will inherit the rest of the estate when she dies. If interest rates rise she can always opt to roll the interest over or just pay some of it and roll over the rest.

She can afford to pay for any care she may need herself, but she is part of a very loving and supportive family and family support would always be there for her.

Will the neices look after her if she needs long term care?

Is there a rosy coloured picture of equity release? It is a very useful way of releasing capital but needs to be thought through, but for some people it is a good option.

A friend of mine has used it to reduce her potential liability for inheritance tax. she has no children but nieces who need to get on the housing ladder . She has taken out an equity release scheme, given money to her nieces at an age when she can reasonably hope to live seven more years and her estate is now below the inheritance tax level.

She pays the interest on the mortgage so that that is not mounting up and her nieces will inherit the rest of the estate when she dies. If interest rates rise she can always opt to roll the interest over or just pay some of it and roll over the rest.

I do not think equity release works as the rosy coloured picture. There is too much cost and you lose the value to your home.

Equity release is an expensive con if you work out the interest thy will eventually charge.

A home has a value. It is an asset. Perhaps not one as readily realised as cash in the bank, or even stocks and shares and not much use if you need a new washing machine.

But the value in it can be released through equity release and lifetime mortgages and used for what you like from new white goods, a new car or a holiday or house improvements.

Gillybob, Yes that's it, my home is roof over my head and blessing that it is paid. I am certainly wishing the overall maintenance cost was less.

Oh my home isn't savings either Norah it's the roof over my head . Apologies if I didn't make this clear.

I also do not think my home or property would sell quickly, so it really is not a source of readily available savings, is it?

Gillybob, But, to me my paid home is not exactly savings either. Not sure what my home is, but it does not seem to fit savings, to me. Maybe it is just a blessing.

Oh I would think that if I needed they could be sold to raise funds . I know people who call themselves poor but own several (paid for) properties which is definitely not my idea of being poor.

I never think of homes, holiday homes, cars as savings, the money is not available to spend or use in any way.

Trouble is that sometimes if there have been savings on the goods if you opt for the credit you pay the full price - this is certainly true of big items like cars. DH had bumph through to post about so much off and then the 0% offer - I worked out the payments over whatever length of time it was and you were paying full maunfacturer's price. I always try and read the small print.
It is of course your disposable income which is so important rather than what comes in if you have mortgage or rent to pay. I know someone who was not allowed to continue working after a certain age and she could not afford the mortgage on her pension - and of course no housing benefit is payable on mortgages as it is on rent - so she had no option but to sell up and buy a cheaper house outright.

Welsh wife, very interested in your comment about being unable to replace savings after a majority outlay. What I do to try to combat this is to take interest free credit wherever possible. This way I eke out the outgoings whereas I would never replace capital. Has worked in the past but it's a constant juggle.

Exactly Jane - having been in the worring position of having nothing and needing money urgently - once you are able to get something behind you that is what you do.
I wonder if you really ever get over the fear of spending money saved. How much is enough is a bit of a conundrum.

When you need them!

Also surely ' savings ' means different amounts to different people. Some may be happy with £2000 in the bank or perhaps happy with £220,000 and still not know what to do with it . After all what do you do with savings ? Other than save it ?When do they become spendings ?

I was actually asking a serious question - I do wonder what people do. Life doesn't go well for people always we know that - it has been far from smooth for me for long periods.
I assume you do not have a child with a family who lives so far away that any visits need to be sporadic.
I hope you are able to have the support both financially and practically that you need.

If you have no cash savings, or assets you can convert to cash if needed, how do you pay for replacements when you have stopped working? We have an income which is enough to keep us and pay for our trips back to see the family or visit those in USA. - Welsh wife

I have not been out of this country for 23 years, I do not own a car, I rent my house, have no savings and buy clothes from ebay - I am 68 years old and the full time carer for my very sick partner - am I educated - yes, have I worked - yes - as a bank clerk, a graphic designer and a genealogist - so why am I poor? Simply because life is not fair and has thrown a lot of bad stuff at me..... simple as

VERY interesting post - I do not have the money to save and never have had. I manage from day to day and it is a scary business - and I have worked all my life! So, those of you who are able to save, be very thankful you are in that position as you never know what life will throw at you.

The only new car I ever had was a liability from Day 1. Thankfully it was a company car so that was their problem not mine. Offering hostages to fortune, my, now 15 year old, car has been 100% reliable and never broken down or had any major repair and gets through its MOT each year with the minimum of fuss and expense.

We run our cars until they are scrapped. That is from choice and not necessity.

Not the ----

Tong the car monica the savings are sad.y rarely replaced!!!!! We do only replace the car when really necessary - the last twice we have found a new car a far better bargain than a secondhand one.