What will happen if I spend my savings?

The only ones my search brought up were retirement or shared ownership Aldom.

mrsnonsmoker

My rent is currently around £700 a month, so no way can I continue to pay that, in retirement, on the ordinary state pension. I need to plan. I could do various things including sell my share in the house, but then where would I live? I'd have to get a very small flat which is great if they are available for the money I have at that time. Or I could move to Cambridge.

It would appear, at least to me, perhaps reducing outgoings would benefit you in retirement. I hope you find something to reasonably purchase with the money you have at retirement. Good Luck with your decisions.

Not all bits of East Anglia are expensive.

Doodledog

I'm sure most people prefer to own land 😀. It's not an option for everyone though.

I know that.

That is precisely why I suggested what I did - perhaps I was daft.

In terms of DWP Benefits, deprivation of capital is when someone intentionally reduces their savings or investments to increase their benefits. This can apply to Pension Credit.
Monica is correct about deliberately spending money in order to receive free care though.
This would be a matter for the local authority to decide. It has nothing to do with benefits.

Why not sell your share in the house you part own? That would release a hefty sum and you are not living in it. Apologies if I’m misunderstanding the situation here. That what I meant when I said ‘divorce settlement’? as you seem to be disregarding this potential asset.

Fried green tomatoes I’m sorry you’ve lost me - I only have 1 house I live in it?

Thank you to all who gave advice I’ll leave the thread now so that the posters who’ve taken over the discussion can chat away. I’m not sure if they understand that you normally discuss what the OP has posted but hope they enjoy my thread!

If it’s any help to you, why not contact Age Concern or Citizens Advice and get a true picture. Might be a better outcome. I’d caution against a retirement flat as while it might be cheap to buy, the monthly outgoings can be worse than a mortgage. My MiLs was nearly £800 each month. And they’re hard to sell if you need to.

Norah

HousePlantQueen

JaneJudge

is that the catch then of these retirement properties, the maintenance charges?

Yes, that is why the market rate is so much lower than non retirement properties. Where and what on earth can you buy for £45k in Cambridgeshire Norah? Not even a holiday park caravan as far as I can see!

Sorry, not relevant to post, just curious

www.rightmove.co.uk/properties/157515977#/?channel=RES_BUY

www.rightmove.co.uk/properties/141430427#/?channel=RES_BUY

The flat in Peterborough doesn't state the ground rent nor the maintenance charge, which is likely to be in the region of £3000+ a year. Not only that, but it only has a 60 year lease left, which means that its value could go down. That's probably why it's so cheap in the first place because most lenders won't lend on short leases.

Norah

Barleyfields

Rightmove shows the only available properties for around £45k in Cambridgeshire are retirement properties or shared ownership. Retirement properties come with hefty service charges and shared ownership come with rental payments (and possibly service charge). It would be singularly unwise to spend all your money and have nothing to fall back on.

Would not service charges or lease on leasehold, whilst owning the flat, be better that continued renting? If that was what one could afford.

Perhaps I'm confused.

No, it wouldn't be better. Firstly, I'm not sure that Housing Benefit pays for maintenance charges. Secondly, the OP would have spent all her savings and wouldn't have any safety net.

I know somebody who has just bought one of these 55+ apartments, but she's 93 and has sold a property for £400,000. The lady knows that she has (if she's lucky) about 10 years left, so has put money aside from the money she made on the sale of her house. However, the OP doesn't have a significant amount of capital.

mrsnonsmoker

Thank you to all who gave advice I’ll leave the thread now so that the posters who’ve taken over the discussion can chat away. I’m not sure if they understand that you normally discuss what the OP has posted but hope they enjoy my thread!

I'm afraid that is the nature of thr beast here on GN, we address the question, meander off, come back again, but generally achieve what the original poster wanted. What we are not is a one stop advice centre. There are others such as Citizens advice and Age Concern who are, so if you seek a direct, non rambling answer, they are your best bet. Good luck

HousePlantQueen

mrsnonsmoker

Thank you to all who gave advice I’ll leave the thread now so that the posters who’ve taken over the discussion can chat away. I’m not sure if they understand that you normally discuss what the OP has posted but hope they enjoy my thread!

I'm afraid that is the nature of thr beast here on GN, we address the question, meander off, come back again, but generally achieve what the original poster wanted. What we are not is a one stop advice centre. There are others such as Citizens advice and Age Concern who are, so if you seek a direct, non rambling answer, they are your best bet. Good luck

Or it could be said that people gave what they thought was an answer that might work - and they were wrong, I was. However, a wide range of ideas is never overall bad advice.

Indeed, we often learn from a wide range of ideas, Norah, as we veer wildly from subject to subject!

As I got totally confused over whether mrsnonsmoker rents, owns, part-owns the property she lives in and why she can't buy an annuity with the remainder of her pension fund when she retires, I'll leave the thread too.

Unless more information comes to light to make the situation clearer.

I'd hang onto it as you may need it for your care. Councils are definitely tightening up as they are so short of money and yes, it would be seen as deprivation of assets.

mrsnonsmoker
Thank you to all who gave advice I’ll leave the thread now so that the posters who’ve taken over the discussion can chat away. I’m not sure if they understand that you normally discuss what the OP has posted but hope they enjoy my thread

I fail to see the need for heavy sarcasm. Threads can meander and develop a life of their own, particularly when OP has been unclear in their information.
But as has been said, we are not the CAB or a Financial Consultant but a discussion forum where we share experiences, yes, advice, but also opinions.
Sorry this was not what OP wanted on what she deemed HER thread.

It's difficult without all the information to make really helpful comments.
Really staying where you are, part owning a property sounds like a good investment.
And getting help from Age uk and citizens advice, good move too.

I think that the OP didn't like the truth.. she is in a flat which she part owns and with very little equity by the sound of it. She will find it difficult to pay the rent when she retires and so is hoping she'll have it paid with Housing Benefit. However she won't be entitled to that because she will have a lump sum of about £45.000..
so her question, as I understand it.. is should she dispose of that money so that she can claim Housing benefit and pension credit.. or try to survive on her pension and the lump sum..
It's risky either way and in her position I would consider moving North to a much cheaper area and buying a little house outright..

My take was that the OP lives in a shared ownership property and therefore owns a share and pays rent on the rest. She might be able to buy a further share (not always possible) and thereby reduce the amount of rent she pays.

Barleyfields

My take was that the OP lives in a shared ownership property and therefore owns a share and pays rent on the rest. She might be able to buy a further share (not always possible) and thereby reduce the amount of rent she pays.

That would certainly be the ideal solution (for me anyway) Barleyfields but I got the impression, maybe wrongly, that that wasn't possible..

It is difficult for people to uproot themselves in later life, and it is a shame that the OP might have to do this.

It is also a shame that people who have saved into pensions (or other savings) have this used against them when it comes to getting money that those who don't are given. Means-testing traps people in poverty, and I will never understand why more of us don't resist it.

However, that is the situation the OP is in. She has saved, and will have to use her savings to pay the rent until she has next to nothing left, and only then will it be paid, so effectively she has saved for nothing. She could move away from her support networks and start again in retirement, and then be allowed to spend her own money on herself, or she can stay put and pay it to a landlord until sh's no better off than if she hadn't saved in the first place. The flip side of that, or course that if the OP were given HB, that would be unfair to those who have saved to buy a house and not pay rent in retirement.

The only way I can think of to avoid this situation and other similar ones is to have a much higher (non-means-tested) pension payable to all who have contributed, but this would mean much higher taxation and is too late for people already in later life. We can't expect that to be funded by the young, but bringing it in now for future generations might protect them from finding themselves in similar situations.

Homestead62

I'd hang onto it as you may need it for your care. Councils are definitely tightening up as they are so short of money and yes, it would be seen as deprivation of assets.

Not everyone needs to go into care.

If, at 62 your immediate need is to replace your car then of course you should do so. There is no need to live a life of misery, depriving yourself of any enjoyment because, at some unspecified time in the future, you just might need to go into a care home.

Less than 3% of elderly people go into a care home and less than 25% need care at home of some kind.
Deprivation of assets to me would be realising you might need care in the not-too-distant future and giving away lump sums to your family, putting your house into your children's name, deliberately disposing of your assets.

Penny-pinching to the point of not going on a holiday, driving around in a car which needs constant repair, in order to pay for care you might never need will do you no good at all.

My impression was not that the OP was concerned about future care, though she used the phrase ‘deliberate deprivation of assets’, but about her ability to obtain benefits to assist with paying rent. That came across (to me), very strongly though she berated me for saying so.

Yes, I think the thread went on to paying for care which probably annoyed the OP.

Anyway, I think mrsns has left the building.

If you are 63 now, then you have another four years until you reach State Pension age. I don’t think you have said what you SP will be but Pension Credit will only top your income up to £218.15 per week at current rates. If you have 35 years of NIC which currently gives a SP of £221.20 per week then you won’t qualify for Pension Credit. The upper income limit for PC is always kept deliberately just below the rate of the new State Pension.

The question is whether you would qualify for Housing Benefit (and Council Tax Discount) which are not dependent on receiving Pension Credit.

I suggest trying an online calculator to see what you might be entitled to. Turn2Us is good and you can play with different scenarios.

benefits-calculator.turn2us.org.uk/

MoneyHelper explains deprivation of assets and notional capital:

www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

It says:

If, at the time, you wouldn’t have been able to predict needing benefits, it might not count as deprivation of assets.

You might be asked to provide paperwork and receipts to back up the date, and the reasons for getting rid of savings or assets. If it’s decided you have deliberately deprived yourself of savings or assets, you’ll be treated as if you still had them. This is called notional capital.

That first sentence is key. You are already predicting that you will need benefits so you might be in danger of being accused of DoA but it would very much depend on how you spent the money. Buying a modest car or making some modest home improvements as future proofing might be considered differently to taking holidays or giving money to relatives.

Use the calcultor and seek advice from CAB or Age UK. They will have experience of different scenarios and databases of similar cases they can refer to.