Comparative costs past and present
Comments
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Yes I am/was👍🏻
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I don't think there is anything unsafe about it per se but like all financial services you do have to go into them with eyes wide open. You have to accept that when owners die the estate is worth less than if you had 100% equity in the house. Interest rates are fixed for the term of mortgage so its easy enough to work out what the hit would be on the equity. If who ever takes out such a loan decides not to pay the interest obviously the original loan builds as the interest is added. However all these things can be illustrated before anyone signs on the dotted line. So there should be no nasty surprises. Perhaps the danger is that people are blinded by having a large sum of money available to them without realising the lasting impact it will have on their remaining equity. It does mean, of course that there will be less to pass onto children and I suppose one could argue to the Government by way of care costs?
David
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Having helped both our children with house deposits, we are now putting away funds for 3 of our grandchildren using monthly contributions to investment plans. The 2 older ones (15 and 11) have done very well, so we think it will soon be time to stop contributing for them and concentrate on the 2 little ones, on the basis that contributions to all would stop at the same time if anything happens to one of us, and little Nathan has no investment plan as yet, so has a lot of catching up to do.
The scheme we are using for the first 3 is no longer available, so we need to find some other way of investing for Nathan, possibly a Junior stocks and shares ISA, but are not sure about "locking away" the money till he is at least 16, or it becoming available to him when he turns 16........the money the other 3 will get is held in bare trusts till they are 22, unless the trustees agree to release it earlier, which would not happen if they were going to fritter it away! But it remains accessible if necessary.
We need to do a bit of research on all this after Christmas as a decision needs to be made in the next few months.
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No they are not, I’ve used them over 30yrs successfully. With due respect JV this isn’t your field of experience so I’d leave it👍🏻
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We didn't help our children with deposits but always took housekeeping when they lived at home and were working. Unbeknown to them we were able to save it and they both had a pleasant surprise when they received the proceeds earlier this year - I was having a financial sort out, prior to a possible move. Don't ask 🥲🤐.
We have always saved a regular amount for the granddaughters since they were being carried, however we seemed to have slipped for our grandson - I blame Covid and appalling interest rates and being retired😉. But have spent time considering the situation. Because the granddaughters live overseas I always just had accounts for them, marked with their names so our children know its intended destination! I did ask a solicitor after mum died about doing a trust, but apparently it's not viable in a few 😂 10's of thousands, if you have that much, 😱🤔, so knocked that idea on the head - especially as it would attract fees........
Now we've put all the proceeds into a bond for now to be divided between however many grandchildren we have at our demise! Or we can dip in to assist before if necessary. That way we retain control until we're not here, and looking for UK grandchild it seems they can have access at 16, which is not always a sensible age to receive a cash sum. A little every month does mount up over the years.
As KjellNN says the eldest, if you are lucky enough to be able to do this, will always have a head start and possibly that also starts whilst you're still working so not so many financial constraints apply to income. So I'd be interested to read the fruits of your research - cheeky aren't I?
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Plus one.
I'm rather anti them accept in very exceptional circumstances and I sincerely hope that those doing so will be seen by the authorities as 'deliberately depriving' should publicly funded care need to be applied for 🤬🤐. I'll say no more on the subject.
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And we would be interested in any pointers from others!
B2.....this bare trust thing is not like putting things in those expensive to operate trusts. It just means that the investment accounts are the property of the children and not considered as part of our assets any more. Both of us and our daughter are trustees, she being the more financially aware of our children.
The funds were managed by Baillie Gifford at special rates as they were for children, but they handed the management of them on to Hargreaves Landsdowne a couple of years back to concentrate on the actual investing side of things.
After 3 years the advantageous dealing rates they had negotiated will cease and we will be charged £1.50 extra each month, which when we are only putting in £25 per month for the 2 older ones, does not make sense.
Callum is getting £100 per month at present, so we may keep his going. Poor Nathan missed the boat completely there.
Both he and Callum have Halifax Kids Monthly Savers, so are accumulating cash, but for the long term we need to find something better due to the dire interest rates on cash in the bank.
Both our children went straight from Uni to jobs and property ownership, so no board paid. They had some money from Grandparents, and some savings from working while studying, so we added to that for their deposits.
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Interesting point….I wonder what the local authorities attitude is to somebody who’s blown the lions share of their property value on an equity release funded high life before needing residential care? Giving it away can attract big tax bills, so it would seem grossly unfair if it’s ignored?
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Ok thanks.
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I became interested in the subject of Equity Release because of a chance conversation with my younger sister who happens to be a divorced single person. She owns a rather nice house on the south coast and has no children. Prompted by that phone call I started to do some research. Fortunately she is financially secure so really has no need for such a financial product. But, if for example, if she needed to extend her house to, say, provide a full downstairs bathroom. Equity release would be a good way of paying for it. As its likely that such an extension would add to the value of the property and the impact on the final inheritance would probably be minimal. Now if she decided to finance a round the world cruise (she likes cruises) one might argue that perhaps its not the best use of the money but given that it is hers who should be critical? Some people who are property owners but find it difficult to save actually use equity release to help children with a deposit to get on the property ladder, you can only have the money once and you could argue its better to have it earlier than later. The Government can only take from you what you have. In terms of care they can only charge against the value of your estate. The current Government has decided to punish those with less valuable estates rather than using a percentage system which would be fairer so why should anyone care?
David
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Is it usual these days for salespeople at caravan, M/H and car dealerships to ask a prospective purchaser where they have obtained their money from when a vehicle is being bought for cash? Surely many people would think that it is a very intrusive question!
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I’ve been questioned by Bank staff when decent amounts have been deposited due to fraud protection but never by a company I was doing business with. I would do some research vbfg, it is very odd to say the least. I’d really question them too. If you rock up with £50k in Asda bags I too would be ‘wondering’ but not if it’s a bank transaction or cheque, using the official channels there is inbuilt protection. Plus they can run security checks on you without the intrusive questions-I’d not give any info until I had answers👍🏻
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I've noticed that even with bank transfers over a certain limit a text is sent basically asking is this you and in one bank you have to enter in a code sent by text.
I can understand if the transfer was asked on a computer as it's an extra, if annoying at the time, security measure. but if you've done the transfer on your phone?
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Neither is it mine, Rocky..... just keeping quiet and reading!! However, I do have sympathy with Viatorem's opening post. Caravanning appears to be getting relatively more expensive, generally. Not sure if I think it is a 'cheaper way of getting a holiday' - it's more of a lifestyle choice.
Putting the initial outlay cost aside, it is probably cheaper for us to rent a cottage for 3/4 nights on the Isle of Lewis with Harris than to take the van for the same length. Increased ferry cost for the caravan (at least it was last time I looked) - campsite fees, lower mpg on a quite 'thirsty' car + wear and tear, and a slower journey towing a caravan. If we go up to the Outer Hebrides and hire a cottage, I can take the small car which has a much better fuel consumption - not just getting there and back, but running around whilst we are there.
I'm also beginning to wonder if this is the best time to invest in a new caravan? With the price of larger caravans now coming out the wrong side of £30,000, if I leave it a few years, I may very well not be able to afford it!
David
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I agree, I think it’s a lifestyle many enjoy some don’t, cheap it ain’t🤷🏻♂️. You need to hold onto your LV for many many years to make it pay for itself DSB👍🏻
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It’s all a comparison of apples and pears. Things aren’t the same.
I bought a brand new caravan for £250 when I was earning £1000 a year. But my goodness it was basic - plate glass windows and gas lights and I had to fit my own cold water pump. But it was a step up from a boarding house at Bridlington which was the alternative at the time
There are no brand new caravans these days for a quarter of a year’s wages - the new ones have leisure batteries, motor movers, fridge freezers, microwaves and computer controlled heating. Mobile bungalows nowadays for old people looking for serviced pitches. They are not for youngsters at all.
Would I start again with a caravan if I were young again? Of course not - the holiday and travel alternatives these days are endless. You should see what my grandchildren do and where they go. If I were young I would be with them .
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