I am currently involved in a couple of financial disputes. This isn’t normal for me and I’ve lost sleep over it.
Several thousand pounds are at stake, most likely. Perhaps sneaking into five-figures. That sounds a lot of money – it is a lot of money – but I asked myself this morning why exactly is it bothering me so much?
Is it the money – or is it something else?
I can afford to lose the claims. It would represent a small hit to my net worth. I say that not to boast (many readers could brag considerably more than me) but for context.
My point is the money shouldn’t matter to the extent its potential loss has me awake at 3am.
Money money money…
I care much more about money now I’ve got some compared to when I had none.
I’m not proud of that but it’s true.
Causation, correlation, or coincidence?
A bit of all three I suspect, and more besides.
As a student and into my early 20s, I only thought about money in the abstract. Like a cliché from central casting, I spent more time flirting with ideas like communism and anarchism.
Obviously it’s easier to eschew personal property when you haven’t got any. Even so, I made no effort to materially level up.
I’d avoided student debt thanks to a grant, a few part-time jobs, and some nascent financial savvy, but after a stint working on at college after graduation I was unemployed for six months.
I told myself I was a writer, but I didn’t write anything. Eventually I realised I’d soon not have the money to cover my rent for a room in a dubiously converted garage in Brixton, and a friend explained how to sign-on.
I went along, felt ashamed, didn’t claim anything, and started applying for jobs.
My first job paid well enough, though nothing like what my degree might have earned. No matter, I soon quit anyway for a 50% pay cut to do something I was excited about. I proceeded to earn mediocre money but have a lot of fun for a decade – and to save a slug of what I did earn.
I dumped my savings into high interest savings accounts. I thought about them maybe once a year.
I won’t go into my not-buying-a-property saga again, except to say that chasing house prices was what first made me pay attention to getting more money as an adult.
But even then, I did so inefficiently.
I didn’t invest (fortunately, as I dodged the dotcom bust) and I did extra freelance work in my spare time rather than leveling up my earning capacity. And then, 15 years or so ago when I was finally earning a reasonable amount relative to my flaky ‘career’ path, I jacked it in to co-found a company that in a couple of years I’d extracted myself from for breakeven1.
My friends recently sold that company for a few million.
Money is a mind virus
This was around the same time I got serious about investing. But I continued to live a double life, like Keanu Reeves’ Mr. Anderson in The Matrix.
Friends saw the same freelancer living his breezy graduate student lifestyle. I continued to favour freedom and fun in my work over a higher income.
But by night I was devouring investing forums, financial books, and company reports – and turning what had been a house deposit into a six-figure investment portfolio.
If someone saw contradictions, I explained my Bohemian investor philosophy to them.
But perhaps I was already changing.
Money had started becoming important to me, or at least something I thought about everyday. It was becoming part of my identity – if only in secret to myself.
Starting a financial blog might have contributed to this shift. I don’t think it was a big factor. My idea of financial independence is the freedom to not think about money, not the strictures of hitting a target to quit work or live off some particular sustainable withdrawal rate. I’ve never been very goal orientated in that respect.
Before I bought my flat, I realized I could probably stop working if I wanted to, and if I was prepared to live well within my means.
But I didn’t want to – though I didn’t much want to spend the money either.
I was much more interested in beating the market. And I think it is precisely tracking my returns and my net worth for the past half a decade that has really made a mark.
My experiments in ultra-active investing – and also the meticulous record keeping involved – has reminded me multiple times an hour exactly what my net worth is, and how it has fluctuated since yesterday or even in the past 20 minutes.
Live that every day for a few years and it must change how you see the world.
Before I mostly only logged into my broker accounts when I’d found a better idea to replace one of my existing ones, and so wanted to trade. There could be months in between. I didn’t track my returns, just my net worth – and only when I remembered to or was bored.
It was like a game, and almost as a side-product I grew wealthier. But eventually, thanks to all the tracking – and the aim of market-beating – my own money became like the all-important high score to beat.
On the house
I’d argue though that until a couple of years ago I still wasn’t taking it all super seriously.
I believe buying my flat (and getting a giant mortgage) is what has really focused my mind on money, in terms of how much I have – and what I now have to lose.
As I’ve long suspected, owning even a new home is a mini-money-pit.
First you incinerate a chunk of your savings with stamp duty and legal fees. Then there are the escalated material demands – a fancy sofa here, a distressed mirror there – and beyond even that owning a home is a kind of Bizarro fruit machine that only spits out bills that need paying, at least until you’ve a few years of price appreciation on the docket. (Something I don’t expect for a while…)
In addition, for me getting a mortgage was partly an experiment to see how it would feel to run what’s effectively a levered portfolio.
It turns out I don’t like the feeling very much.
I’d fully intended keeping my (interest-only) mortgage indefinitely but I can see that thinking may change. I suspect the debt is mildly stressing me out.
Either way the mortgage definitely has me thinking far more often about my net worth and my liabilities.
The mortgage has introduced paths where I can go bankrupt. They’re not high-probability paths, but without any debt they weren’t there before.
Mo money mo problems
So that’s the backdrop that I believe has me losing sleep over contested money that once I would have gunned for but not been overly disgruntled about.
If I wanted to stress out about money, I should have started 20 years ago:
- Compared to the money that went begging for all the years I had a fun job and wasn’t paid very much, the amount at stake doesn’t matter – yet I didn’t think about money in those days.
- Compared to what I’ve missed out on by not sticking at that first employer (which was acquired a few years later by Microsoft, and everyone had shares) or my start-up or believe it or not two other on/off employers where I would have eventually had a stake, it doesn’t matter. But I never thought about staying at those places for money, either.
- Even compared to certain woeful stock picks I’ve made over the years, this money isn’t a huge deal – yet I usually just shake my head and move on when an investment goes wrong. I felt bad in the financial crisis, but I don’t think I lost an hour of sleep. (I had other things to worry about.)
- Compared to the gains I’ve missed out because I de-risked my portfolio after buying my flat – because I care now about losing what I’ve got, and I want more buffers – it’s again a minor sum. Opportunity costs count!
- Compared to the amount I’ve chucked away in stamp duty and (likely) house price falls it doesn’t matter much.
And yet it has got to me like none of the above.
I suspect it’s partly a bucketing issue. My mental accounting is going awry, because I feel wronged.
That’s illogical.
I believe there’s probably also something extra going on because one of the disputes involves my flat. There’s no doubt your own home feels more personal to you than even a closely-watched portfolio.
I probably also feel a bit dumb for not spotting one of the issues earlier. But stock picking has revealed my inadequacies many times before, so that’s really no excuse.
Money boxed
Warren Buffett talks about the sins of omission compared to the sins of commission. Buffett means that he regrets not buying multi-bagging Amazon or Google more than he kicks himself for buying shares in a loser.
In conventional investing, the most you can lose is whatever money you put in. But the potential upside you miss when you don’t invest is unlimited.
Something like that is true in life.
In my brain – though evidently not my gut – I know it’s not worth getting stressed out about a few thousand pounds now when I might have been earning six-figures decades ago if money was all-important to me.
Perhaps it’s the same for you, maybe not. We all have missed opportunities, or at least paths we didn’t take.
But I fear I’m also more stressed because I’m getting old and crotchety, and old crotchety people end up caring more about money.
You see it all the time. Is it because we’ve more to lose as we get older? Or is it because there’s less time to make back whatever we lose or never had – a kind of holistic sequence of returns risk?
Is it because young people are so rich in ways we will never be again, whatever we do – and so we can’t bear to lose any compensation for that impoverishment?
Or is it simply what the economists call loss aversion? That the pain of loss is greater than the joy of equivalent gains, and so when you’ve more to lose you’re naturally exposed to more pain?
I’m not sure but I don’t like it.
One reason I bought my flat is because I saw I’d been succumbing to what I call Buffett’s folly – the idea that every purchase today has to be priced in terms of the 30-odd years of compounded returns forgone.
But in the real world you have to live – and spend – in the now, a little, now and then.
Excessively caring about money as you get older sees everything from wealthy but freezing pensioners refuse to put the heating on to One More Year syndrome when you really want to retire to the spectacle of Californian tech titans buying their third back-up nuclear-bomb-proof bunker in New Zealand.
Being reckless with money is beyond foolish.
But being good with money also means keeping it in perspective.
Do you find yourself caring more about money then you’d like to admit as you chase down financial independence, strive to secure your retirement, or even just pursue higher returns from the stock market? Bare your soul in the comments below!
p.s. Since I wrote this post – and did all this musing – the larger of the disputes has been amicably resolved. Karma or coincidence? I don’t know but I’ll take it, along with the insights it produced. A friend who read an earlier draft suggested I hold back this update for the sake of dramatic tension, but I don’t want anyone getting out their tiny violins for me without cause. Besides, the point is it wasn’t *really* a huge deal. Finally, pertinently, I don’t feel as relieved as I’d previously felt aggrieved…
- After taking into account the money I’d put in and the opportunity cost of lost earnings. [↩]
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“Excessively caring about money as you get older sees everything from wealthy but freezing pensioners refuse to put the heating on”.
Whaa. Guilty as charged.
Well, perhaps not so much, but enough to make me think. Time for that golfing holiday methinks.
And a new driver.
TI, appreciate your honest musings on this subject.
Not sure if I can provide any helpful psychoanalysis, but I can tell you that you’re not alone in thinking about this.
I also reckon that the more money I have, the more I worry about it… or at least the more I think about it. And then I worry that my obsession with analysing and re-analysing options and scenarios is something to worry about… and that worries me.
I have always been a worrier in general, and about financial security in particular – something drummed into me by frugal parents making the best of low salaries, and exacerbated by my dad’s redundancy at an impressionable age for me. But even paying off my mortgage recently hasn’t really brought (or is that bought) me the peace of mind I expected. I’ve just moved the goalposts back to my FIRE number.
To a large extent, I really do enjoy the analysis – that’s how my brain naturally gets its kicks – but it does concern me that on occasion this strays into unhelpful analysis paralysis, and non-fun worrying. Definitely something I need to guard against.
I too would be interested to hear other’s experiences in this area. Even trying to analyse the emotion out of our investing decisions can be itself emotional…
MoMo
Thanks for sharing this. You definitely aren’t alone. These are the kinds of issues I frequently talk through with clients. Not having money creates one set of issues. Having money creates others. On the issue of debt, the closer I get to repaying my mortgage the more I realise that seeing that number go down is far more ‘valuable ‘ to me in emotional terms than seeing the value of my invested assets go up. Could be an age thing- I no longer have the luxury of years and years of human capital on my side if things go wonky – so yes, even the thought of / actual losses hurts much more than the thought of / attainment of gains.
I suspect it is principles and not pounds that is troubling you. The pounds do give you a way of measuring the trouble, but maybe they can’t minimize it even if they are (relatively) minimal. Maybe time will ease any unresolved troubles.
Frankly, as I get older I worry less about money. That’s the beauty of FI – I know I can cover the bills and have a little fun without struggling. But I tend not to monitor my portfolio every hour, or indeed make many changes to it and have come from a very poor background.
Three observations I would make (based on hard-won experience):
Is it worth your time worrying or fighting? I price my leisure much more highly than my work time (say 2-5x hourly salary depending on what I’m being asked to do). How much is xxx hours of worrying about these disputes worth to you?
Is learning gained worth the price to be paid? What will you gain from the experience?
Will you make a clean getaway? Sometimes it is worth paying just to get an individual or individuals out of your life and never have to give them a moment’s thought again (particularly if they might return).
Life is short and extra time can ultimately be worth more than money.
We took a particularly obnoxious couple to court over an unpaid bill of £700. It came to dominate my life over 12 months. We won. Like it or not it became a jaw clenched fight to the death. What keeps you awake isn’t the financial consequence, it’s the need to get emotional closure. ‘ Its now become a matter of principle’.
It’s all part of being a partially human being.
Of course if can get out if hand, like the recent news item if someone losing £30k fighting a speeding ticket or something: ditto boundary disputes with neighbours.
Ok, partially rational human being. They do say proof reading skills are the first thing to go in the slide to the nursing home!
If you “don’t feel as relieved as I’d previously felt aggrieved” maybe, as you say, this is just another example of loss aversion? With a dash of being vindictively/gratuitously/completely (delete as appropriate) wronged to spice it up (obv. you’re in the right!)
Personally, I’ve gone from obsessively tracking my portfolio value to excessively modelling different asset allocations. The latest being adding gold and bonds to try to reduce drawdowns… Which is a bit daft as I will have a state and small DB pension to do that job. Ho-hum.
haha, this very much chimes as I’m currently in the process of getting gazundered by an unscrupulous buyer (hence my ill-tempered and probably unjustified comment toward xxd09). Its good to be reminded how powerful the lizard-brain is with respect to the frontal cortex every now and then. Rational economic agents we are most certainly not (at least not when anything actually happens)!
This —>>> “My idea of financial independence is the freedom to not think about money”
Knowing that you can clear your bills without worrying is the definition of riches and freedom to me. That’s why we’ve worked so hard to cut spending, get rid of our mortgage and bump up passive income from investments and buy to let. No idea if we’re anywhere near hitting some 25 x spending number, but it’s meant we could switch to lower earning roles and still sleep at night.
Principles are dangerous things: https://www.bbc.co.uk/news/uk-england-hereford-worcester-49641063!!
Please to read you sorted your thing amicably.
Yes, as people get older, I believe MANY obsess more about their finances…..me included| Healthy? I doubt it…..but for many….necessary to feel “in control”
Hi Mr Monevator,
You are such a good fellow helping out your followers I am very sorry to hear of your problems.
I would love to offer advice but as you are at least 97 notches above my (retired) pay grade I feel you have probably thought about everything yourself already.
So how about this.
You seem to be a very nice person.
Maybe the people you have problems with are nice people too?
Even if they are you are probable 127 times nicer than them anyway.
I hope that helps you even in a small way.
If not I can always tweak the numbers!
Thank you for being wonderful!
Cheers
Pete
@ the borderer
‘and a new driver.’ is that a golf club or a chauffeur
I can definitely relate to the anxiety of a leveraged portfolio.
I never considered my mortgage as such but have my first experience of credit card debt and owing family at the age of 38. A 13k credit card 0% balance to pay for some house work and a 20k loan from my dad to get rid of my silly lease car and by a sensible second hand one outright.
Ive got more than 3 times that amount in liquid investments and several other lump sums coming my way over the next 2 years plus about a 1000 a month I can cashflow meaning I can clear this at any time but I still feel mildly stressed at the debt. Financially it just didn’t make sense to cash in investments and being retired my dad has cash on hand and was happy to help but still feels odd.
@Fatbritabroad – Long live FI, eh?
> In addition, for me getting a mortgage was partly an experiment to see how it would feel to run what’s effectively a levered portfolio.
I feel better now about being such a muppet as to discharge my mortgage in my elary fifties, and as a result struggling to borrow money to maximise my ISA and move house, because the FI have no income so can’t borrow money in the mass market.
If it disturbs your equanimity, I was never up to the job of a levered portfolio, so the right answer was had.
Another thought provoking post as we have come to expect from Monevator 🙂
I believe we all have a tendency to worry more about the value of our assets as we get older and see the clock ticking down, when we are young we feel invincible and if our projects crash and burn, we still have decades ahead of us to make up for those early losses… As we get older those decades of time when we are prepared to put in the hard graft to generate wealth also shrink, big losses are much harder to deal with and could put a big dent in retirement pots that we may never fully recover from.
Dont beat yourself up about your money worries, they are a normal and healthy part of growing up past 40 !!
I expect you don’t like owing hundreds of thousands of £ to a bank
Debt makes people miserable
Hi Ermine, what are your thoughts on equity release/lifetime mortgages?
I’m trying to sort out my retired parents who are down to a sub 20k pension income now and no assets other than their house worth 400 – 500k
Really great post. I couldn’t wait to find out what the disputes were actually about!
At the end of the day you are a long time dead. Everyone makes the best decisions at the time on the information available. As they say hindsight is a wonderful thing, but you can never go back in time only forward. Just remember experience is what you get when you don’t get what you want.
P..S. Love the blog and read it avidly every week.
I find that I definitely ended up thinking a lot more about money as I acquired more of it. (Or perhaps that’s what reading pretty much every Monevator post for 5 years does to you. 🙂 ) That doesn’t necessarily mean that I worry about it though.
What I can perfectly understand is that any sums associated with a personal conflict or perceived unfairness are emotionally much more perturbing. I can happily see my net worth go down by a 5-figure sum from stock market fluctuations, but for example having a £5 penalty charge imposed on me by my energy supplier essentially because their own IT system is broken really agitates me.
Losses are much harder to handle than gains. This a biological bit of hard wiring of the brain
Reason-when we were apes roaming around the savannah-make one mistake/loss and you could be eaten/dead/out of the game
Finding food/a gain on the other hand was necessary to survive but not immediately life threatening-if you missed one opportunity another would come along soon enough
This affects people’s investing behaviour -losses hurt so much more than the equivalent pleasure from a gain
The temptation to resolve the pain of a loss can then lead to erratic investing
xxd09
Sorry to hear of your woes, TI. I occasionally find myself worrying about these sorts of disputes. They never seem so important when they fade after the event. Time is a great healer. Have the courage to do nothing sometimes. Worry is often about what action to take like some frenetic chess-player on speed — not moving is often an option and a dominant one at that.
Good luck in finding karma.
When we’re young, we don’t usually have the proverbial pot or window, but struggle on. Having established a lifestyle at whatever level, choice, or enforced, the reluctance to give that up sets in. And thats how it starts, and probably the reason that old people are reluctant to turn the thermostat up.
Michael Caine was once quoted as being scared of ever returning to when he had no money as the reason that he continued to work. Probably the same reason that Cilla Black continued with Tesco voiceovers having spent years as the highest paid woman on tv.
As long as the national and local media continue to report anything from the mundane to the ridiculous which happens within or without their £x valued property, most will continue to worry about money or the lack of it. And that’s what finances the city Porche.
@Marco > who are down to a sub 20k pension income now and no assets other than their house worth 400 – 500k
Worth considering the alternatives to equity release first – downsizing looks like the obvious win here. The trouble is there are still two of them so the trouble is what happens if one needs care. If there’s just one of the couple alive and their life expectancy is < 10 years then equity release looks like a potential win but where there are still two it's a much tougher call because of the risk of care costs, which can deplete joint assets leaving the survivor with fewer options as and when they need care. Against that we should remember that only 20% of us end in a care home, most of us die first, so the joint risk of both ending up in a care home is ~ 5% (probably a little greater as there will be some correlation of wealth, background and lifestyle due to assortative mating)
@Neverland
It also makes people fabulously wealthy and therein lies the rub.
Thanks ermine. It’s a total minefield with my folks! They want cash to continue a high spending lifestyle and have burnt through over 200k over a few years purely on pleasure, and that tap is now 90% gone. They are looking at houses not much less than the one they are in now, when they probably need another 200k in order to achieve their stated goal “live it up to 75 then live in rice and beans till we die”
Yikes @Marco, you really do have your work cut out for you there… without doing the calculations, as such, it looks like that set of objectives vs. resources isn’t entirely realistic. Quite apart from trying to find a financial solution; it sounds like some lifestyle reflection might be in order!
It’s interesting that the financial ‘predicament’ that they find themselves in, and presumably they find troublesome, is almost exactly (in terms of numbers) identical to my FIRE target. If I had a £400K property (paid off) and a £20k/year income I would be declaring FIRE and dancing my way toward the office exit… singing “so long suckers, I’m freeeee”…
It’s all to do with perspective I guess. Good luck!
Marco, what a lovely son you are!
In your place I’d tell them: (a) how foolish their current and continuing course of action is, (b) that they’ll get no help from me in helping them to persist in it, and (c) when they’re in dire straits in the not-too-distant future they needn’t expect me to bail them out.
Love means sometimes being truthful rather than complicit ……
And of course, being in a very judgemental (read sanctimonious ) mood they’ll no doubt expect the taxpayer to support them with pension credit top ups when they do run out of money… Feckless pensioners!
But seriously, do they currently have a pension INCOME of £20k p.a. e.g. DB, or pension assets of £20k? The former they’re fine, the latter, well that sounds like some burn rate assuming they started with several hundred thousand.
As someone wanting to access his SIPP in 18 months and start to shift it into ISAs, these sort of stories worry me that the government will change the rules again. Even if they are outliers.
I mostly think about money to break up the boredom, more as a sport than a worry, on the whole inflation takes care of the mortgage.
In fact checking it is risky because of the temptation to tinker, or lose discipline and repay mortgage
Just got my first credit card having reached my late 50s with no debts, no mortgage and a reasonable wack in my personal pension, still investigating. Reason for this brave inroad into commitment. Booking flights after the Thomas Cook fiasco. All the time I was sat in the bank, I wanted to just get up and scrub the idea. Might just rip it up, it’s irritating me before I get it.
Investing , investigating ,let’s call the whole thing off.
For me a dilemma of pursuing FI is that you have to be committed and if you are committed I cant see how you be can carefree at the prospect of losing part of your wealth.
Im not on about short term market falls or even relatively small personal disputes – im on about the prospect of significant loss that may need years of work to replace (even if thats actually possible).
You cant invest so much time and effort and money in something like FI and at the same time serenely contemplate heavy permanent losses.
@surreyboy – you can accept significant loss better if you have faith that it’s only temporary, and that the market has always recovered from every crash and correction it’s ever had, the question is if you can hold that faith and when you need access
Finding out when principles should trump monetary loss should be possible if you are able to get the data from insurance companies.
They deal with this equation every day, and almost every claim.
I have witnessed several times the company I work for (well, more specifically it’s financial director) despair when the insurers pay out sums on the steps of the court rather than fight for the principle of the case.
In the end, it is purely about money for them, or minimising loss, which accounts to much the same thing.
Occasionally I have seen the insurers fight and win when I could see no reason to fight myself. This leads me to believe they know a lot more than me about loss.
If anyone has articles they could point me to on this, it may make interesting reading.
JimJim
Thanks Tyro. I definitely won’t be bailing them out if they succeed in deliberately depriving themselves. My wife wouldn’t allow it anyway lol.
We have had many years of digs from my parents about driving old cars, not buying an expensive house and more recently, disadvantaging our kids by not sending them to private school.
I hope my parents end up in better financial shape than I think they will, but it’s not looking good. They may get help from my sister and BIL who have received quite generous handouts.
They have one stage pension between them (don’t ask) and my dad has an annuity (non inflation linked, no spousal benefit on death).
Fortunately my dad retired just before the pension freedoms so bought an annuity (albeit probably didn’t search the market for the best price).
My mum bought some crap annuity with 40k from her financial advisor despite he warning her he was a salesman (works for Zurich) and I think that pays around 300/month for a period of time then it’s gone. Inexplicably, despite being a life long self employed high earner with 3 kids, she didn’t accumulate NI credits for a state pension. I’ve tried to understand how she accomplished this but failed. She just says she isn’t getting any state pension, but my dad is??
@Marco – no state pension?!? Are they/you sure? They can get a quote about what they’re entitled to online from the DWP. Takes a few weeks but well worth it. Mine showed I have maxed out my SP so no point me accruing more years.
@Marco re your Mum’s NI contributions – I think women (or anyone) claiming child benefit only started to be credited with NI in the early 90s or thereabouts, so if her children are all older or she didn’t claim child benefit, then she won’t have got those free credits. Many many years ago – but within my lifetime – married women paid a lower NI contribution (the so-called “married woman’s stamp”) but got no state pension or other benefits from doing so, it being blindingly obvious to everybody at the time that the wife was a dependant of the husband (who did get a pension). Perhaps the earlier part of your Mum’s career was during this phase? Otherwise it may be that some creative accounting (cough) or flying under the radar over the years meant that she never paid the contributions.
I was recently involved in a financial dispute with HL. (Fuckers.) It was not a lot of money, but it had me frothing at the mouth. I chalked it down to principle.
I don’t like your theory about this being correlated to one’s getting old and crotchety 😉
Probably the creative counting option. I remember they used to get paid a lot in cash
There are times when we all might need an event to spur us on to change our lifestyle. If we can do it without these events then Great.
I recently had a hip replacement and needed to recover so I went to a gym. As an ex Rugby player at quite a high level I thought why did I stop training 20yrs ago?
I then had cataract operations and realised that good sight is such a blessing.
A great rugby player and friend of 43yrs was murdered in London.
These events put life and finances into perspective. Money is a route to happiness but does not of itself bring it Good health, good friends and Good family are worth more than anything money can buy.
I have found that the older we get the more that money becomes less important for those that have some. For those that don’t I now give more and try to make people happy through my giving.
I have been gazumped and guzundered, lost opportunities and made some gains in my life of modest significance but nothing beats my wife, family and friends who have supported me.
So I would say Invest in these and many money generating opportunities will follow.
@Marco if your mum ends up outliving your dad, she might become eligible for Pension Credit:
https://www.gov.uk/pension-credit
and I would definitely check her state pension record:
https://www.gov.uk/check-state-pension
Wow, thanks so much for this Chris. Looking into it, I think my mum might actually be eligible for state pension credit immediately, which could mean 5k per year.
https://www.citizensadvice.org.uk/scotland/benefits/help-if-on-a-low-income/pension-credit/before-you-claim-pension-credit/check-if-you-can-get-pension-credit/
What an insanely generous society we live in, constantly bailing out the feckless and calling it fair.
If this works out you have my eternal gratitude. I won’t get any thanks from my parents of course.
@BabyBoomerCroydon
Fine and unarguable words BB. I intend to give up worrying about money soon! But in the mean time, I need to keep an eye on it 🙂
JimJim
@marco pension credit is means tested at a household level, so it will depend on what your dad’s income is as well, and any savings.
The benefit system for pensioners is MUCH more generous than for working age people, before you get too overwhelmed by the state’s generosity
The ‘insanely generous’ pension credit level is £167 a week for a single person, £255 per week for a couple.
Ah that makes sense. Still reassuring my mum will probably get credits at some stage.
I believe my dad bought an annuity with no inflation protection and no spousal death benefit.
We often underestimate how much peace of mind is valuable until we lose it with stress and worry. Glad your issues are resolved. Most of my net worth gains have been due to the house so I have slightly different opinions. But then as they say real estate is local. The inefficiencies still exist in real estate as compared to publicly traded securities. Depends on which side of the transaction one is involved with.
I’ve always thought equity release a winner. As long as you don’t expect the whole value of the property (may be down to half) depending on age of the youngest person living at the address. BUT if you have to move out well everyone in the nursing home gets the same sized plate no matter how much they contribute. Full price or nothing.
Interest only remortgage appear to be a thing these days for retirees. I know this is a few years old but worth a look if still relavant?
I only know this in my vain attempt to securing a “working, solvent” IO mortgage for myself. Man the lending criteria is insane currently. Could be worth an fresh article TI TA?