What will happen if I spend my savings?

Barleyfields

Service charges on retirement properties can be very high.

Would the service charges not be less than renting?

Barleyfields

The first property isn’t in Cambridgeshire and the second is a retirement flat.

First is not in Cambridgeshire - correct. Looked out of my border.

Second is retirement flat, correct -- and ?

Service charges on retirement properties can be very high.

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.

The first property isn’t in Cambridgeshire and the second is a retirement flat.

M0nica

You can spend the money on anything you like. It is up to the authorities to prove that the intention of any of the expenditure was to deprive yourself of assets in order to obtain benefits - and that is not easy to do, plus you would have a right of appeal.

So spend it as you wish.

I don't understand why having a lovely holiday, buying a reliable car etc would be counted as deprivation of assets.
The money is there, surely, so that you can have a comfortable and enjoyable retirement.
Why live in misery just in case you might need care one day? You might not and what will happen to that money then?

I do think deliberate deprivation of assets specifically in order to avoid care costs ie giving money away when you know you have to receive care is wrong, but what are savings for?

Can you not buy an annuity with the fund, mrsnonsmoker? I've not heard of a pension pot with those restrictions before.

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

It depends upon what kind of "savings" you have. A pension pot isn't savings. Savings amount to money you have saved, either under the mattress or in a savings account. That's money you can spend, sure, but you won't have it as a cushion against poverty later on.
There was a post similar to this a while ago, when it seemed the OP wanted to find a way to diddle the government out of benefits and still have money/assets of his/her own. That's a dangerous path to tread, as the Civil Service is full of very intelligent people who've been assigned to ferret out scams and "loopholes".
Besides, you can't tell what the benefits system will be like by the time you retire. Better to protect the spare resources you have now rather than relying on theoretical future handouts.

I know that shared ownership properties are not retirement properties. I said the only properties for sale in Cambridgeshire for around £45k are retirement properties or shared ownership, and distinguished the outgoings which come with each.

Barleyfields a relative of mine has shared ownership, it is not a retirement flat. They are in the North of England though.

rafichagran

Barleyfields

It seems you want to spend your money in order to get benefits?

Thats harsh, poster wants to spend her money wisely to look after herself in her older age.
A new car would mean he/she could get around, do shopping and not rely on the children if a parent.
You need to keep some back though for parachute money, washing machines, fridges and white goods go wrong.
Just a thought could you look into shared ownership with your 60k, a small flat, in that case you will have Lower rent. I do know though it does depend on where you live whether you could afford this.

I think she would need to look very closely at her finances. If she has no (or low) savings, she will probably be eligible for Housing Benefit. I would imagine that Housing Benefit would only pay for the rent, but she would have no savings to fall back on.

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.

Barleyfields

It seems you want to spend your money in order to get benefits?

Thats harsh, poster wants to spend her money wisely to look after herself in her older age.
A new car would mean he/she could get around, do shopping and not rely on the children if a parent.
You need to keep some back though for parachute money, washing machines, fridges and white goods go wrong.
Just a thought could you look into shared ownership with your 60k, a small flat, in that case you will have Lower rent. I do know though it does depend on where you live whether you could afford this.

JaneJudge

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

Service charges and the value when you sell the flat/apartment. The company will have rules who can buy it.

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

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

Norah

Perhaps consider using the pension pot lump sum draws on a small flat. In Cambridgeshire there are many lovely small flats for less than £45k.

Add a wall bed (we've comfortable wall beds in our extra bedrooms yielding desk room for each of us) and gain floor space during awake hours.

Are you sure? I live just south of Cambridgeshire. My partner and I were looking for somewhere to live in the area last year. Admittedly, we wanted a house, but most were expensive compared with national average.

I've just looked on Rightmove. The cheapest I could find was an over 55s apartment for £85,000. The annual maintenance charge is £3524.2, which the OP would probably struggle to pay.

Perhaps consider using the pension pot lump sum draws on a small flat. In Cambridgeshire there are many lovely small flats for less than £45k.

Add a wall bed (we've comfortable wall beds in our extra bedrooms yielding desk room for each of us) and gain floor space during awake hours.

If you have income or savings from an occupational pension, it's unlikely that you will be eligible for Pension Credit. However, the criteria for Housing Benefit is slightly different.

As a general rule, you're expected to live on the full amount of State Pension (either as State Pension or SP plus other income) PLUS housing costs ie rent and Council Tax.

So, as others have said, buy a reliable car and update appliances, so they last. Then your savings will be reduced. When you only have the allowed amount in savings, you will become eligible for Housing Benefit and something towards your Council Tax. You will also be eligible for help towards medical, dental and specs costs.

Sorry, I can't be more helpful because I don't know all your details (and I don't want to know), but your situation will be very similar to what mine is now.

Barleyfields

I’m not trying to cause an argument mrsnonsmoker. I was referring to your words I will be renting into retirement and not really able to afford the rent, hence claiming pension credit is important. I’m not suggesting you shouldn’t spend anything, but the impression I had from your post was that you were looking for things to spend your pension pot on so as to get pension credit. As has been said, if you get the full new state pension you won’t qualify for pension credit, and if you have no other savings that pension pot is going to have to last for the rest of your life.

You can apply for benefits if your state pension leaves you with too little income to live on. Renting on the state pension can leave many on the breadline.

You can spend the money on anything you like. It is up to the authorities to prove that the intention of any of the expenditure was to deprive yourself of assets in order to obtain benefits - and that is not easy to do, plus you would have a right of appeal.

So spend it as you wish.

could you use it to buy an over 55s retirement property? I live in a very expensive area and there are retirement properties for @60k that look like perfectly nice flats. It would at least solve the rent issue in the future?

I don't understand this thing about pension pots and only having state pension. Surely the pension pots will give extra pension. It sounds as if she can only draw it out in lump sums.
The system really doesn't encourage one to save, does it.
Personally I would think about earning as much as I could until retiring and seeing if I could buy something somewhere.
Perhaps using those pension savings as a deposit.

I’m not trying to cause an argument mrsnonsmoker. I was referring to your words I will be renting into retirement and not really able to afford the rent, hence claiming pension credit is important. I’m not suggesting you shouldn’t spend anything, but the impression I had from your post was that you were looking for things to spend your pension pot on so as to get pension credit. As has been said, if you get the full new state pension you won’t qualify for pension credit, and if you have no other savings that pension pot is going to have to last for the rest of your life.

If you get the full state pension it’s unlikely that you would qualify for pension credit as your income would exceed, unless you have some kind of disability, if you get PIP etc.
I wouldn’t spend it on a new kitchen if I was renting.
Have you had a pension forecast from DWP? If you will get the full pension and therefore just be over the limit I would personally keep the savings as security for when you are older.
If you won’t qualify for full pension then I would buy what is reasonable e.g. a new car, new washing machine, cooker etc that you will probably need to replace within the next few years anyway. That is not deprivation of capital.
The first £10,000 of savings is ignored; then for every £1000 over that it will be taken into account as £2 per week income. So if you still have £12000 in savings, then £4 per week would be taken into account as extra income in addition to whatever state pension you will receive.
Sorry for the long rambling post!