How do retired people pay their rent?

[winjim]

The state will pay initially but if you have assets like a house or savings they will claw it back after probate.
If you have no assets then they will pay for a basic cremation.

I won't have any assets, I'll be dead.

 

[Dave7]

I was brought up to believe that buying a house was a VERY BAD idea. Shortly after we married (1968) a friend bought a 3 bed semi for £1,700 and told me to get one. I said "WHAT.......take a mortgage out for that amount...........no way". 10 years later we took the plunge and bought our first house. I kid you not I was s*****g myself as shortly after that interest went up to 16%.
A woman I know (aged 70) has worked all her life and retired 2 years ago. Her husband left her with 5 kids when they were young. She has just sold her (small) house, given all her kids some money and is spending her money on holidays.......LOTS of holidays. Her philosophy is.........."I have worked and paid taxes all my life. When the money runs out the state can keep me" I find it difficult to argue with that

 

[Tenacious Sloth]

I was brought up to believe that buying a house was a VERY BAD idea. Shortly after we married (1968) a friend bought a 3 bed semi for £1,700 and told me to get one. I said "WHAT.......take a mortgage out for that amount...........no way". 10 years later we took the plunge and bought our first house. I kid you not I was s*****g myself as shortly after that interest went up to 16%.
A woman I know (aged 70) has worked all her life and retired 2 years ago. Her husband left her with 5 kids when they were young. She has just sold her (small) house, given all her kids some money and is spending her money on holidays.......LOTS of holidays. Her philosophy is.........."I have worked and paid taxes all my life. When the money runs out the state can keep me" I find it difficult to argue with that

I think she has to live a further 7 years after gifting her kids or they may be liable to inheritance tax. I’m no expert though, so this may have changed.

I quite like her approach to it all though. Fair play.

I reckon if you run out of money in your 80s it won’t matter too much as all you’ll want to do is sit in front of the TV and dribble.

Graham

 

[Cycleops]

Let's hear it then?

I never said it was my argument, I have taken a different route but there are plenty of others who haven’t.

No pension here other than my state pension... plus i've been renting all my adult life.

I presume that housing benefit will take care of my rent if i reach retirement age... failing that, I've got the Raymond Mears books of woodcraft and survival to fall back on

 

[Dave7]

I think she has to live a further 7 years after gifting her kids or they may be liable to inheritance tax. I’m no expert though, so this may have changed.

I quite like her approach to it all though. Fair play.

I reckon if you run out of money in your 80s it won’t matter too much as all you’ll want to do is sit in front of the TV and dribble.

Graham

Anyone is legally entitled to gift a certain amount each year without tax worries (I think it is only £3K). So either one person £3K or 5 people £600 each etc. I think you are correct in that the IR will come after your estate if you pop your clogs with 7 years. I have no idea how much she gifted them but I understand it is well over the "legal" amount allowed.

 

[Deleted member 26715]

Anyone is legally entitled to gift a certain amount each year without tax worries (I think it is only £3K). So either one person £3K or 5 people £600 each etc. I think you are correct in that the IR will come after your estate if you pop your clogs with 7 years. I have no idea how much she gifted them but I understand it is well over the "legal" amount allowed.

Again no expert but when I asked for advise about this I was suggesting I gave the house to the kids with a caveat that we could live in it to the end of our days we were informed that it wouldn't work as it's nothing to do with HMRC as your care home costs are paid for by the local council & they have an indefinite amount of years they can go back over.

 

[winjim]

[QUOTE 5258248, member: 43827"]Easy to say hypothetically, when you're young and healthy, and a little bit selfish as most people's spouses, partners, kids or close family will usually care enough to stump up.

If I thought that either of us would be around to collect, I'd bet you have a regular funeral.[/QUOTE]
It's not hypothetical, I really will be dead.

You're absolutely right that I probably will have a normal funeral though and of course I hope I'll be able to put something away to cover the cost.

 

[MontyVeda]

Again no expert but when I asked for advise about this I was suggesting I gave the house to the kids with a caveat that we could live in it to the end of our days we were informed that it wouldn't work as it's nothing to do with HMRC as your care home costs are paid for by the local council & they have an indefinite amount of years they can go back over.

and if you sold the house instead if giving it to your kids?

 

[marzjennings]

Her philosophy is.........."I have worked and paid taxes all my life. When the money runs out the state can keep me" I find it difficult to argue with that

As someone who grew up on the state (I still wonder how my mum ever got us fed) I find her argument something I have personally argued against for my entire working life. I have been lucky enough to be able to put money aside for retirement and will be majorly p!ssed off if I don't make it to retirement and if I end up relying on the state towards the end of my life.

I've been putting away at least 20% of my income for almost 20 years and will continue to do the same with about 15 years left to go. I will hopefully retire on between 50-75% of my final income, with no mortgage and enough cash for some great vacations.

 

[User269]

Talking to some friends recently it become apparent that it’s quite often more expensive to rent than pay the interest on a mortgage

True, but if you only pay the interest on a mortgage, how are you going to repay the capital at the end of the term?

Not sure if it's quite what you meant, but I can't believe that interest only mortgages are still available, very popular, and that there seems to be no requirement to demonstrate how the capital will be repayed at the end of the term.

Back in the 90s there was a requirement to take out an endowment policy with an interest only mortgage, and although most of them fell short of the full capital repayment, at least you were some of the way there.

I'm hearing stories from people over 60 who have 'paid off' their mortgage, and are unable to repay the capital (anything from £100,000 upwards), and are too old to qualify for a re-mortgage.

 

[Lullabelle]

My grandparents rented and gran continued to rent until her health became so bad that she moved in with my folks. She had her pension and a bit of benefit but not much. When she passed my folks had to pay most of the costs.

Ok, things are different now but renting looks like the only option for many. First time buyers are havng a pretty hard time right now.

 

[Mrs M]

Best advice I ever got was from my uncle, save and get on the property ladder asap.
I bought my wee flat aged around 20/21 when mortgage rates were high but got a 100% mortgage. I rented this property before buying and cost less each month to buy it!
Often went without but got through.
Mr M and I should be comfortable into retirement and just hope we have a good few years to enjoy, got lots of plans
Do feel for the “young” folk today though, needing large deposits, etc.

 

[night cycler]

I don't know were you get all these “free things” from, I've been living off the state since I was 38 and I don't get FREE rent, Ctax, glasses, dental, scripts and pension credit.

Yes I do get help with housing benefit and council tax, but I still have to find £250 per month for rent and council tax, I get some money off my glasses with an HT1, but people even with their own home can get that, and as for free funeral if you have the money why not, I have a pre-paid one paid by myself monthly, you could do that if I can.

Think yourself lucky that you were able to buy your own home “and in the middle”, I didn't ask to become disabled, I went to work quite happy that day, but came home 6 months later from the hospital to find I had nothing.

I don't know were you get all these “free things” from, I've been living off the state since I was 38 and I don't get FREE rent, Ctax, glasses, dental, scripts and pension credit.

Yes I do get help with housing benefit and council tax, but I still have to find £250 per month for rent and council tax, I get some money off my glasses with an HT1, but people even with their own home can get that, and as for free funeral if you have the money why not, I have a pre-paid one paid by myself monthly, you could do that if I can.

Think yourself lucky that you were able to buy your own home “and in the middle”, I didn't ask to become disabled, I went to work quite happy that day, but came home 6 months later from the hospital to find I had nothing.

.

First and foremost I would like to say that I am sorry to learn that you are disabled.I wish you well.

You say I am lucky because I bought my own house.

It has nothing to do with working in heavy industry 2 weeks after leaving school?

Working as much overtime as I could get?

3 different shifts in the same week?

Buying old cars when I could aford new ?

Deferring gratification?

Only buying items when I had the money to?

Yep I'm lucky alright

 

[lane]

Best advice I ever got was from my uncle, save and get on the property ladder asap.
I bought my wee flat aged around 20/21 when mortgage rates were high but got a 100% mortgage. I rented this property before buying and cost less each month to buy it!
Often went without but got through.
Mr M and I should be comfortable into retirement and just hope we have a good few years to enjoy, got lots of plans
Do feel for the “young” folk today though, needing large deposits, etc.

I posted upthread about my experience nearly 30 years ago when most of my friends in thier 20s owned their own home. You are right the big difference then was it was easy to get a 95% or 100% mortgage whereas now you need a big deposit. This seems to be the result of regulation following the 08 crash but is this a good thing? It makes it impossible for many to buy, but is a boon for buy to let investors.

 

[MontyVeda]

Biggest problem in Lancaster for rented housing is it's a university town. The buy to let landlords don't want to rent a three bed house to a family when they can call it a four bed house on the student market and get £80-£100 per week for each room. There's loads of student accommodation on campus but it's more expensive than living in town, so finding a house or flat to rent if you're not a student in Lancaster isn't easy.