52 yr old woman on low income seeking advice on what to do with cash lump sum

F

Fyffes

Registered User
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17
Personal details

Age: 52
Spouse’s/Partner's age: Deceased Oct 2023

Number and age of children: 3 aged 26yrs, 22yrs, 17yrs. (All living at home. 26 is earning but low income as has significant needs, 22 in full time Uni, 17 in school final year)


Income and expenditure
Annual gross income from employment or profession: €34,500
Annual gross income of spouse: n/a

Monthly take-home pay: €2,400

Type of employment: Civil Servant. HSE. Part-time

In general are you:
(a) spending more than you earn, or
(b) saving? Saving generally


Summary of Assets and Liabilities
Family home sold last year. Profit of €212,000 when mortgage paid off
Cash of €170,000 Partners Life Insurance. And €105,000 savings
Defined Contribution pension fund: Defined Benefit Pension Scheme. Public sector, 20 years part time service. Briefly paid AVC’s in 2008 of €1500 total
Company shares : None
Currently renting at €1,200 pm.


Family home mortgage information - Offer
Lender: BOI Letter of offer issued July ’23 in my name only (partner was on early medical retirement) for €106,000
Interest rate 4.5%

Term :18 years
Type of interest rate: fixed for 60 months

Think this offer is valid for 12 months

Monthly repayment would be €716

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month? Yes

No loans. 2008 car needs replacing


Other savings and investments:

Do you have a pension scheme? Yes.

Do you own any investment or other property? No

Other information which might be relevant

Life insurance: No


What specific question do you have or what issues are of concern to you?

I have €487,000 and I’d like some advice on what to do with this.

I’m currently on sick leave from work. I took carers leave in Sept 23, partner died Oct and I have not returned since. Currently on half pay. As acknowledged elsewhere on AAM there’s a lot of upheaval in our lives at the moment and advice would probably be not to make any big changes but I want to buy a house for myself and my 3 dependants and I’d also like to change career. I hate my current job but would need a total retrain to move out of it.

I could buy and be mortgage free but not sure if putting everything into a house would be advisable. Or would it?

Apologies for the vague (clueless) answer re pension. That’s because I’m vague and clueless on this. I’m waiting a callback from HSE Superannuation who will make this all clear. Hopefully I’ll be able to add exact figures then

I wasn’t married so no access to partners pension. I’m aware of the recent supreme court ruling in regard to a Widowers entitlement to pension despite not being married. This could eventually apply to me but will take legislative change which I’m assuming is slow

This has exhausted my ability to explain my finances which I’m assuming are considered a mess but please feel free to ask any questions if there’s stuff I’ve left out

Thanks for any advice
 
Last edited:
Sorry for your loss it seems like you’ve been through a lot.

What would you need to pay do you think to buy a house that would be suitable for everyone’s needs? Is your rental currently below market rates?
 
Thank you
Rental is well below market rates. House isn't suitable though. Only 2 bedrooms for 4 of us
Anything suitable I'm looking to buy (and there isn't much) is in the €400,000 to €450,000 range.
 
Why did you sell the family home?

It does make sense to buy a home because it will be ignored for any means-tested benefits, whereas if you have €450k in cash, you won't get any means-tested benefits.

Not sure how you were approved for a mortgage but I don't think you should take one out now as your income has reduced since you applied.

Brendan
 
Brendan Burgess said:
Why did you sell the family home?
Click to expand...
As part of a separation (divorce?) agreement?

Selling family home post separation, to buy new home

My partner and I are separating. We are both named on KBC fixed rate mortgage for the last 13 years. We are selling the home and ex partner agrees that I am getting all profits from this sale to buy a house for me and the children (2 in Uni & 1 teen). The house is valued at 330,000. There is...
askaboutmoney.com
Which you (@Brendan Burgess) counselled against at the time:

Selling family home post separation, to buy new home

My partner and I are separating. We are both named on KBC fixed rate mortgage for the last 13 years. We are selling the home and ex partner agrees that I am getting all profits from this sale to buy a house for me and the children (2 in Uni & 1 teen). The house is valued at 330,000. There is...
www.askaboutmoney.com
 
Brendan Burgess said:
Why did you sell the family home?

It does make sense to buy a home because it will be ignored for any means-tested benefits, whereas if you have €450k in cash, you won't get any means-tested benefits.

Not sure how you were approved for a mortgage but I don't think you should take one out now as your income has reduced since you applied.

Brendan
Click to expand...
Sold the house mostly because the location no longer suited with school and college. Also the mortgage repayments were high, €1,500pm.
 
ashambles said:
Is that 487k earning interest right now?
Click to expand...
Recently asked advice here so currently in process of moving it into main banks and prize bonds. Need access to it in case house comes up so can't put it in high interest account
 
When your youngest finishes school do you have any sight yet of what they might do - having flexibility over location will obviously dictate your housing out goings or mortgage. That said, I would prioritise advice around not making rash decisions with so much going on for your family.

You mention BOI approval - but is this still valid or renewable after period of sick leave?

Kids in uni, finishing school etc...all flags for potential high monthly outgoings. I think it is easy to be stressed but still leak too much money when there is a pile of cash - you need to protect this cash pile, I would encourage maintaining a very strong line by line budget and tracking all expenditure.

I would not beat yourself up over limited knowledge of your own HSE pension account value/figures. If it is some form of DB pension and not DC, then typically it is ok. It generally can not be used to help in the here and now, and if it does need any focus it will be sequenced after you stabilise your current plans and financial path.

You mention potential retraining/career shift. Many people dream of career shifts and expand a huge amount of mental energy thinking about this such that it becomes an unproductive distraction. It could be helpful to build some clarity on what this might be, will it be in a space where jobs are and will remain plentiful (to reduce your risk and support a decision to invest in yourself). This is never an easy process but full support to go for it, but if your assessment is "not right now" then do your best to focus on current work opportunities, and maximising them and upskilling within it with skills which may be transferable in 2 or 3 years.
 
Thank you for all that advice
Re BOI mortgage offer, I believe I will have to submit last 3 months payslips before drawing down so that's no longer an option.
I'm trying to see all this upheaval less negatively and try find the potential for change that could come from this and your response has really helped in clarifying some things to focus on. So thanks!
 
I am in awe of you - keeping it together with so much to deal with.

I would agree that you should buy a house with your cash. If you are currently able to manage your rent, that gives you€1200 a month you can save for the future, your youngest's 3rd level education and any inevitable bills that arise from house ownership. At some point, in the not-too-distant future, it would be good to get some advice in the Pensions sub-forum about whether you should make additional contributions to your public sector pension to purchase additional years of service.

Best of luck.
 
If not already in place might any apply?
- disabikity allowance for oldest
- incapacitated child tax credit
- single parent tax credit
- SUSI grant application

Anything that can bring the net income up will make a huge diffetence.

The mortgage offer most likely no longer stands due to change in circumstances.

What is the 22 year olds plans? Consider this for your housing needs especially if they may move out which would reduce size of house needed. Alternatively if they pllan to live at home for some time ensure they are contributing once they are working.

You have a lolt going on and you are doing really well and have a number of options.
 
Thank you all for the kind words and validation of upheaval and stress
Just knowing to focus on house purchase is really helpful and clarifies the next steps needed for me and my family
All the advice has helped me feel I can "stabilise my current plan and financial path" which is exactly what I needed to push through this confusion and overwhelm so again thanks for the time given and the advice and the thought provoking questions
I will definitely be back in time for the Pensions subforum as suggested
 
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