How do retired people pay their rent?
- Thread starter Tenacious Sloth
- Start date
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Bromptonaut
Rohan Man
- Location
- Bugbrooke UK
How do retired people pay their rent?
If they're on a low income they will get all or most of it paid by the state. In Social Housing the full rent is eligible even if they've got unoccupied bedrooms - bedroom tax only applies to those of working age. In private rentals rent is limited to the Local Housing Allowance for the area and only for number of bedrooms 'needed' so only one for a couple.
Once income is much above Pension Credit (about £250pw for a couple) they have to contribute on a sliding scale. Same for Council Tax.
If they have a mortgage and on are low income there is help with interest (only) as part of Pension Credit. Until April this was a cash benefit but it's now a secured loan repayable on sale or death*. Guiding punters on this is a minefield, the secured nature of the loan means it's potentially regulated mortgage advice, not something the voluntary advice sector is geared up to provide.
There are two separate reasons folks might want to give property or cash away. One is to avoid it being used for care fees and the other is inheritance tax. A whole industry runs on providing advice and dodges for either or both and the rules are different. A Council funding care is looking for intentional deprivation of assets - decisions vary and are fact dependant. For Inheritance Tax there are various reliefs and exemptions together with rules about stuff given away in seven years before death. We've just had to go through my late Mother's bank statements to identify gifts in last seven years of her life. While Dad kept meticulous records she didn't do book keeping and survived him by 21 years.
The exemptions/reliefs are pretty generous though. Net estate was a whisker under £500k and there's no IHT payable.
Anyone giving away their home to their offspring under a scheme to avoid care fees or IHT needs to be wary. There are any number of pitfalls ranging from prodigal sons and failed businesses to marital breakdown.
* I confidently predict that this comes back to bite government's backside in a few years time when people find it's eaten their inheritance.
If they're on a low income they will get all or most of it paid by the state. In Social Housing the full rent is eligible even if they've got unoccupied bedrooms - bedroom tax only applies to those of working age. In private rentals rent is limited to the Local Housing Allowance for the area and only for number of bedrooms 'needed' so only one for a couple.
Once income is much above Pension Credit (about £250pw for a couple) they have to contribute on a sliding scale. Same for Council Tax.
If they have a mortgage and on are low income there is help with interest (only) as part of Pension Credit. Until April this was a cash benefit but it's now a secured loan repayable on sale or death*. Guiding punters on this is a minefield, the secured nature of the loan means it's potentially regulated mortgage advice, not something the voluntary advice sector is geared up to provide.
There are two separate reasons folks might want to give property or cash away. One is to avoid it being used for care fees and the other is inheritance tax. A whole industry runs on providing advice and dodges for either or both and the rules are different. A Council funding care is looking for intentional deprivation of assets - decisions vary and are fact dependant. For Inheritance Tax there are various reliefs and exemptions together with rules about stuff given away in seven years before death. We've just had to go through my late Mother's bank statements to identify gifts in last seven years of her life. While Dad kept meticulous records she didn't do book keeping and survived him by 21 years.
The exemptions/reliefs are pretty generous though. Net estate was a whisker under £500k and there's no IHT payable.
Anyone giving away their home to their offspring under a scheme to avoid care fees or IHT needs to be wary. There are any number of pitfalls ranging from prodigal sons and failed businesses to marital breakdown.
* I confidently predict that this comes back to bite government's backside in a few years time when people find it's eaten their inheritance.
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