Jump to content

equity release


Recommended Posts

That is now known as a 'deprivation of assets' and can result in the local authority putting a charge on the house for the care costs associated.

 

Not having a dig or anything just thought you might like to know what they could do.

No that's ok mate always willing to be corrected if I am wrong, but I thought that rule was only for 7 years after the date of sale?

Link to post
Share on other sites
  • Replies 76
  • Created
  • Last Reply

Top Posters In This Topic

my neighbour who is nearly 90, is an ex deputy head, he retired at 55 on full pension, its index linked naturally, add his state pension and he is having a great life. it actually seems unbelievable, but fair play if you can get it.

No doubt it was a common thing of its time, but not now.

 

If you want a decent pension these days you have to stack it in yourself and keep an eye on what it's doing.

 

I'd be interested if there's anyone out there now under 45 with a forever final salary scheme (or on the 'promise' of a final salary scheme - as any serving police officer of an age will know that promises aren't all they're cracked up to be).

 

Foreign office maybe perhaps? Even Judges' pensions aren't what they used to be.

 

As for private sector, can't think of any at all.

.

Edited by Mungler
Link to post
Share on other sites

At work, our insurers have said we can do and involve ourselves in anything apart from equity release. It is the one single thing we can't get involved in, not even to witness a signature; and that is all I need to know that no one should touch it with a barge pole.

 

It is probably because it is the singular worst financial option possible for anyone and litigation inevitably follows once people realise it wasn't right for them and they have unecessarily hosed a shed load of cash away.

 

The best bit is there's an industry full of financial advisers who will push equity release (and will dress it up on paper as being suited to your needs when arguably it is not) and that is because there is so much commission in it for them.

 

At 60 years of age, considering equity release is genuinely the daftest thing I've heard this year. I'm glad you have asked the question on this thread so we can collectively talk you out of it.

 

There is a real problem at the moment as people live longer and don't have accesss to a traditional (family run, will be there next year) kind of financial advice. I have seen some absolute shockers (one leading to suicide) where people have been fleeced in financial / investment schemes.

 

Anything involving carbon credits, film / theatre production, air port car parking, storage / drop collection, gold / precious stones or mining abroad that isn't Rio Tinto, run away.

.

I would agree with this, a lot of "equity release" schemes are little more than a payday loan secured against your house. I suspect many of the people involved in these schemes are the same people that were selling timeshares in the 80s

Link to post
Share on other sites

No doubt it was a common thing of its time, but not now.

 

If you want a decent pension these days you have to stack it in yourself and keep an eye on what it's doing.

 

I'd be interested if there's anyone out there now under 45 with a forever final salary scheme (or on the 'promise' of a final salary scheme - as any serving police officer of an age will know that promises aren't all they're cracked up to be).

 

Foreign office maybe perhaps? Even Judges' pensions aren't what they used to be.

 

As for private sector, can't think of any at all.

.

 

The Police Pensions 1987 Act was amended in 2006 and again more recently. Under the terms of the 1987 Act any officer doing 25 years service got effectively 1/3 of their final salary, 30 years got them 1/2 of the final salary, index linked. I'm not sure of the terms of the later Acts but they certainly are not comparable. Less pay and longer service to earn it.

 

I retired aged 55 and was lucky to be on the old Act. I declined their kind offer of converting to the vastly inferior terms of the later scheme. But, by selling our house in the UK and buying a bigger, but much cheaper house in France we can live on the modest police pension topped up by a couple of very small private pensions and a few Euros earned mole trapping until my UK OAP pension kicks in in 2021. Cost of living is slightly less out here and we have modest needs so we can get by. I found out last month that if I keep mole trapping for another five years I'll be entitled to a French pension of around £2k per annum so it looks like that's what I'll be doing.

Link to post
Share on other sites

No that's ok mate always willing to be corrected if I am wrong, but I thought that rule was only for 7 years after the date of sale?

I believe that is inheritance tax, anything your given if your relative dies within 7 years you'd have to pay the tax.

 

If the local authority believes you sold the property to avoid it being used to pay for your care (which you would be if you sold to family at below market value) they can put a charge on the house as they could say you have done that to deliberately deprive them of the asset, which should be used to pay for your care costs.

Link to post
Share on other sites

sell the house, book 2 6 month cruises every year. every need is met, doctors, pharmacies and even hospitals on board. waited on for everything and get to see lots of new places. cost wise i would imagine its a lot cheaper than paying £1000 per week for a poor quality nursing home.

Link to post
Share on other sites

I believe that is inheritance tax, anything your given if your relative dies within 7 years you'd have to pay the tax.

 

If the local authority believes you sold the property to avoid it being used to pay for your care (which you would be if you sold to family at below market value) they can put a charge on the house as they could say you have done that to deliberately deprive them of the asset, which should be used to pay for your care costs.

Yep, found this article on said subject... http://www.dailymail.co.uk/news/article-2466361/Councils-spy-parents-sign-house-children-Blitz-families-avoid-care-home-fees.html

Link to post
Share on other sites

I echo some of the comments above just sell up and rent or downsize. No company will see you right and do a deal in your favour with equity release. why release a little equity on their terms? Just sell it and manage the funds yourself.

 

Or keep it and rent it out you will have an income from it them that way. Id be very suspicious of any equity release deal.

Link to post
Share on other sites

Hi Guys,

 

Thanks for all your comments, some interesting reply's I didn't think it would have generated such a response and thanks to those who have sent me a PM or two.

 

Just to maybe clear up a couple of things.

 

We bought the building plot and additional land 16 years ago and built the house. We have approximately 2 acres mostly grass and trees and a large vegi patch. We shed a lot of blood sweat & tears during the build and we don't want to sell up but would like to enjoy what we have, while we are still fit and able to.

As the house is in a rural area where we currently have 4 or 5 similar size houses for sale and have been on the market for a long time, I think selling and downsizing would be very unlikely, although we could rent but having 3 golden retrievers who are first & foremost part of our family means that we would need a suitable sized house for them as well.

We don't have any children that we need to leave our estate to but we need to look at our long term future and hopefully make plans accordingly.

 

Although I am considering stopping work offshore I most likely would need to find something to bring in a little beer money or at least cover my shooting costs but it was a thought that releasing some of the equity could possibly give us a buffer along with my pension pot.

 

We don't intend to jump in without some research and intend to look at our options in the new year and as has been suggested take some good legal advice.

 

Again thanks and all the best for 2017

 

BBL

Im by no means a financial guru.

 

but if you have a plot of 2 acres, can you get planning permission on part of your land and sell it off to a local builder? obviously there will be some costs to pay out first to set this up legally but it should pay off in the end?

 

TaxiDriver beat me to it :lol:

Edited by seph234
Link to post
Share on other sites

sell the house, book 2 6 month cruises every year. every need is met, doctors, pharmacies and even hospitals on board. waited on for everything and get to see lots of new places. cost wise i would imagine its a lot cheaper than paying £1000 per week for a poor quality nursing home.

 

It's certainly cheaper initially. Until you realise that they don't recognise the NHS and charge American style for medical treatment. And, as you get older you'll find medical insurance harder and harder to find.

Link to post
Share on other sites

Im by no means a financial guru.

 

but if you have a plot of 2 acres, can you get planning permission on part of your land and sell it off to a local builder? obviously there will be some costs to pay out first to set this up legally but it should pay off in the end?

 

TaxiDriver beat me to it :lol:

Op, if you do decide to go down this route I would be happy to give you some planning/development advice to see if this is feasible. It's what I do as a day job. PM if you want.

Link to post
Share on other sites

Big problem with most renting agreements is you only have security of tenancy for 6 months at a time and then you might have to move if the landlord decides to sell up or won't renew the tenancy for whatever reason.

Private rents are increasing all the time, so what is £500 a month now could be a lot more if you are still going strong 20-30 years on.

Very few private rental properties allow dogs or any pets for that matter. My Daughter even had to get written permission to keep her 2 cats and pay a security deposit against them doing any damage.

If you find a place that allows pets, their is nothing to stop them changing the agreement at the 6 month renewal

Edited by loriusgarrulus
Link to post
Share on other sites

I'm watching this with interest as it looks like a route I have little choice but to take soon. We are one of Teresa May's 'Jams' families - from council estate backgrounds: We Just About Managed - to buy our first house late in life and finish paying for it.

 

At 65 I have just reached the dizzy heights of receiving the first cheque of my state pension next month as our sole income. The Mrs will start drawing hers in two months. That's about £270 PW between us to pay our way in life.

 

The house needs some minor work doing to it - conservatory roof being the biggest thing to worry about, but we'd also like to have enough in the bank to pay our funeral costs when the time comes. We're constantly in minor debt that we simply cannot shake off, that sometimes means living on credit cards... with expensive long term interest anyway.

 

Now I'm retired I won't be able to carry on paying that out of our pensions. It's only a two bed semi so downsizing isn't an option - and we love it here and want to stay in our quiet little pile.

 

I'm aware the loan doubles about every 10 years but since the value of the house nearly trebled in the 17 years we've had it I think its value will continue to rise at a broadly similar rate. Though I feel shame at having to draw from the kids potential inheritance it will hopefully still set each of them up with a tidy sum towards their own house payments in years to come... assuming they even manage to get on the property ladder that is with house prices rising the way they are.

 

Perhaps the 'sell and rent' Road is a better option. You may well be able to get Housing Benefit too ?

Link to post
Share on other sites

Any money you have in savings will stop you getting housing benefits.

Not if you spend it all lol! It does beg the question,

 

Why should you save all your life, working hard, then finally go into a care home and pay the fees, when the bloke sat in the chair next to you spend all their money living it up, and now receives the same care you do?!

Link to post
Share on other sites

 

Perhaps the 'sell and rent' Road is a better option. You may well be able to get Housing Benefit too ?

We've only ever moved once before when we bought this small house and don't want the stress of moving again now we're fully settled. We'll be debt free when the wife gets her first year's deferred pension cheque in a couple of months or so.

 

 

We're not planning to rush into anything and will see how we get on with our joint state pensions of circa £1000 per month for a while first. We're not big spenders and don't take expensive holidays etc. In fact our spending seems to be typical old folkish. Example we have a 17 years old car, use old Nokia phones and even still had a CRT television till my brother gave me an LED freeview one earlier this year and won't have sky etc.

Edited by Dave-G
Link to post
Share on other sites

Not if you spend it all lol! It does beg the question,

 

Why should you save all your life, working hard, then finally go into a care home and pay the fees, when the bloke sat in the chair next to you spend all their money living it up, and now receives the same care you do?!

because regardless of what other people do, there is nothing better than owning your own home, however humble, or where its located, nothing in life is fair, governments are faced with dilemmas everywhere, I just feel fortunate that I was able to secure a little abode, albeit mortgaged.

 

if the care home fees situation comes knocking at my door one day, then I will take it on the chin and be grateful for the years I had in my house. :good:

Link to post
Share on other sites

You can buy a nice house in the villages north of Cardiff starting from £60,000 with good bus and train links into Cardiff and lovely countryside. Plenty of shooting and the train takes you down to the coast if that's what you want.

 

Brecon Beacons National Park is to the north and the Gower Peninsular not far away. The M4 and M5 give you good road links to almost anywhere and the train from London to Cardiff takes 1hour 55 mins.

 

All my properties are owned by trust funds. Nobody else is going to get their hands on my money when the time comes to go into a care home. Its all down to planning.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.


×
×
  • Create New...