Asset rich cash poor

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hillwalks

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I haven't posted here before but as a regular viewer I've found the site to be a great source for information and advise. At this point I don't feel I need a full money makeover but I would appreciate some informed advise on my number one problem which is that I'm running out of cash!
Situation is I'm 70 this year with a pension fund of circa 800k which generates net 3k monthly income and I also qualify for full state pension. I don't have a mortgage or significant debt ( just a couple of k credit card). But I'm struggling to make ends meet with higher energy costs and growing household expenses. As a result 20k savings have now run down to around 4k and I'm starting to panic. After several years of separation, spouse and I have initiated divorce proceedings which will be a significant cost, circa 10k on my account. The house is worth 850k. So expected equal division of assets will leave me with 400k pension fund and 400k plus from house sale. I expect formalities to be completed by the Autumn or year end latest. Which is all a long lead in to my core question; is there any way I could borrow between 10 to 20k secured on my significant assets? I'm not interested in a bank loan as monthly repayments will just add to my immediate cash flow problems. Final comment is my credit rating is excellent (so far!).
Any advice on best way to proceed would be hugely appreciated as this situation is causing me a great deal of stress.
 
hillwalks said:
70 this year with a pension fund of circa 800k which generates net 3k monthly income and I also qualify for full state pension.
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Am sorry for you predicament.


Can you not draw down more from your pension fund for a while? There will be a higher tax paid in 2023 as a result but in the scheme of €400k at age 70 it seems sensible.
 
There is a lifetime loan from Spry Finance, see here.

But it would be secured on the family home which would only add complexity to the divorce settlement I would imagine.
 
hillwalks said:
I haven't posted here before but as a regular viewer I've found the site to be a great source for information and advise. At this point I don't feel I need a full money makeover but I would appreciate some informed advise on my number one problem which is that I'm running out of cash!
Situation is I'm 70 this year with a pension fund of circa 800k which generates net 3k monthly income and I also qualify for full state pension. I don't have a mortgage or significant debt ( just a couple of k credit card). But I'm struggling to make ends meet with higher energy costs and growing household expenses. As a result 20k savings have now run down to around 4k and I'm starting to panic. After several years of separation, spouse and I have initiated divorce proceedings which will be a significant cost, circa 10k on my account. The house is worth 850k. So expected equal division of assets will leave me with 400k pension fund and 400k plus from house sale. I expect formalities to be completed by the Autumn or year end latest. Which is all a long lead in to my core question; is there any way I could borrow between 10 to 20k secured on my significant assets? I'm not interested in a bank loan as monthly repayments will just add to my immediate cash flow problems. Final comment is my credit rating is excellent (so far!).
Any advice on best way to proceed would be hugely appreciated as this situation is causing me a great deal of stress.
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Tangential issue, but have you applied for the Household Benefits package? It would help a bit with the electricity bills.

Household Benefits Package

The Household Benefits Package helps you with the costs of running your household. It includes electricity and gas allowances and a Free Television Licence. It is paid to people over 70 and to people under 70 in some circumstances.
www.citizensinformation.ie www.citizensinformation.ie

You can get the Household Benefits Package if you are aged 70 or over. You do not need to be getting a State pension and the package is not means tested.
 
hillwalks said:
400k pension fund and 400k plus from house sale.
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At age 70, that should probably be ok.
Can you buy a house or apartment where you live for €400k?

Is the pension in an ARF? If so, as Coyote suggests, you can draw down as much as you need. It's probably no harm drawing down more than you need now as it's going to be split in half anyway.

If you run down your pension pot to zero, you can borrow on the strength of your home.

Brendan
 
I do think it would be worth the OP's while to do the full makeover. Assuming you have a full contributory pension, you've got an income of €50k a year with no mortgage or rent to consider. That's before the social welfare bonuses and energy credits and other things the Govt have paid out over the last year. From the sounds of the original post you are spending around €1k more then your income a month, but on what?

Selling the house and moving to a smaller more energy efficient home may help the situation but there will be costs in buying and selling property + the move to consider.
 
Brendan Burgess said:
At age 70, that should probably be ok.
Can you buy a house or apartment where you live for €400k?

Is the pension in an ARF? If so, as Coyote suggests, you can draw down as much as you need. It's probably no harm drawing down more than you need now as it's going to be split in half anyway.

If you run down your pension pot to zero, you can borrow on the strength of your home.

Brendan
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I have an ARF but the way it's structured means I have limited recourse to cash. I'm wondering about your comment on borrowing on strength of my home, presumably you're referring to a lifetime loan?
 
sorry to hear of your predicament, a good divorce lawyer might be able to get you more than 50% if you fully funded the house purchase. has your wife got any means of her own?
 
mtk said:
get you more than 50% if you fully funded the house purchase.
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it doesn't work that way. Assuming the OPs former spouse is of a similar age; the contribution in regards to raising a family and maintaining the family home over what I would believe is several decades is considered to be equal.
 
Peanuts20 said:
I do think it would be worth the OP's while to do the full makeover. Assuming you have a full contributory pension, you've got an income of €50k a year with no mortgage or rent to consider. That's before the social welfare bonuses and energy credits and other things the Govt have paid out over the last year. From the sounds of the original post you are spending around €1k more then your income a month, but on what?

Selling the house and moving to a smaller more energy efficient home may help the situation but there will be costs in buying and selling property + the move to consider.
Click to expand...
Thanks for comment, I think you're right about doing a full makeover. I didn't get into detail but her income is small so supplemented by maintenance. Also as a bit of a late starter I'm covering some education expenses. And the house dates from the fifties so energy costs are large..
 
Shirazman said:
Tangential issue, but have you applied for the Household Benefits package? It would help a bit with the electricity bills.

Household Benefits Package

The Household Benefits Package helps you with the costs of running your household. It includes electricity and gas allowances and a Free Television Licence. It is paid to people over 70 and to people under 70 in some circumstances.
www.citizensinformation.ie www.citizensinformation.ie

You can get the Household Benefits Package if you are aged 70 or over. You do not need to be getting a State pension and the package is not means tested.
Click to expand...
Appreciate that suggestion thanks, hadn't heard of this package before and 'every little helps'
 
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