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How much to spend on a property

  • 24-01-2012 1:02am
    #1
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭


    I'm 66 years old this year and therefore entitled to a non contributory pension which is means tested and as I understand it, the value of one's own home does not affect the means test but cash in hand does.
    I have about 100k savings + a UK private pension worth about 50 sterling a week.
    I want to buy a property to retire to, but under the circumstances, and in my financial situation, what would be the best option as regards the property price - buy something say around the 80-85k mark, leaving me with a small cash balance or go for something much cheaper, say in the 55k bracket and have a larger cash reserve, which would probably affect the means test.

    Any thoughts on the matter appreciated.


Comments

  • #2
    shangri la
    Registered Users Posts: 952 ✭✭✭shangri la


    More information would be required to determine that based on pension reductions due to cash savings. Its always good to keep a nest egg for a rainy day but only you can decide if the difference in the pension payment is worth the peace of mind of the nest egg.


  • #3
    Ogham
    Registered Users, Registered Users 2 Posts: 1,844 ✭✭✭Ogham


    If you worked in the UK you should be entitled to a UK state (contributory) pension. Have you looked into that?


  • #4
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    Ogham wrote: »
    If you worked in the UK you should be entitled to a UK state (contributory) pension. Have you looked into that?

    I was self-employed.


  • #5
    Ogham
    Registered Users, Registered Users 2 Posts: 1,844 ✭✭✭Ogham


    odds_on wrote: »
    I was self-employed.

    You would still be entitled to the UK state pension if you paid Class 2 National Insurance .
    If you didn't declare that UK income - you might have to explain where it came from if you buy a house.


  • #6
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    Ogham wrote: »
    You would still be entitled to the UK state pension if you paid Class 2 National Insurance .
    If you didn't declare that UK income - you might have to explain where it came from if you buy a house.

    It's been over 25 years sine I worked in the UK but my accountant looked after all my tax payments etc - I just paid what ever he said and to whom. Thus I have no idea if I paid Class 2 national Insurance.
    I don't even have a record of my social security number which I need to get at my pension so will have to spend a couple of weeks in the UK next month to sort that out.

    Incidently, I'm not living in Ireland at the moment but should be back next month, after about 14 years away.


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  • #7
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    Ogham wrote: »
    You would still be entitled to the UK state pension if you paid Class 2 National Insurance .
    If you didn't declare that UK income - you might have to explain where it came from if you buy a house.

    It's been over 25 years sine I worked in the UK but my accountant looked after all my tax payments etc - I just paid what ever he said and to whom. Thus I have no idea if I paid Class 2 national Insurance.
    I don't even have a record of my social security number which I need to get at my pension so will have to spend a couple of weeks in the UK next month to sort that out.

    Incidentally, I'm not living in Ireland at the moment but should be back next month, after about 14 years away.


  • #8
    Ogham
    Registered Users, Registered Users 2 Posts: 1,844 ✭✭✭Ogham


    You might not have paid enough to get a full pension - bu it's probably worth looking into?

    On the original question about the house ... I can see what you're trying to do in terms of beating the means test - and if you have family to pass the property onto it might be a good idea.
    If it was me I think I would just try and rent a house and live off the money rather than blow it all on a house at 66. If you get to the stage where the money gets below the means test level - you can start claiming the pension so you will never be broke.
    Once you hit 70 you will get the Medical Card too.


  • #9
    odds_on
    Closed Accounts Posts: 1,869 ✭✭✭odds_on


    Ogham wrote: »
    You might not have paid enough to get a full pension - bu it's probably worth looking into?

    On the original question about the house ... I can see what you're trying to do in terms of beating the means test - and if you have family to pass the property onto it might be a good idea.
    If it was me I think I would just try and rent a house and live off the money rather than blow it all on a house at 66. If you get to the stage where the money gets below the means test level - you can start claiming the pension so you will never be broke.
    Once you hit 70 you will get the Medical Card too.

    Thanks, Ogham, that's the type of answer I was looking for.

    I had though about renting (knowing that I have cancer, a type that has no cure, but with medication (and a bone marrow transplant, I have got to complete remission - but for how long only God knows - 1, 3, 5,10 years?) but eventually decided that a cheap property might be the better option.

    The only advantage of renting that I can see, would be that I could change location on a yearly basis if I wanted to. However, if I want to buy a small place (maybe in a retirement village) in a couple if years, I then wouldn't have the cash to do that - assuming expenses of ca 15k per year to survive (rent and the rest) - in two years time I'd be down to ca 70k savings. OK, house prices are falling - but not at the rate of my living expenses.


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