Attitudes to spending in retirement

Shirley: I'm  Shirley Ballas  and  welcome  to  Rewirement,  the  retirement  podcast from  Legal  and  General.  I'm  on  a  mission  to  help  you  reset,  reinvent  and rewire  for  the  retirement  you  want.

Every  fortnight,  I'm  joined  by  fabulous  retirees  and  would- be  retirees  with their  own  unique  take  on  retirement.  I'm  also  hoping  that  my  pension  pots will  all  add  up  so that  I  will  be  able  to  buy  my  camper  van.  Plus,  my brilliant panel  of  experts  will  be  diving  in  to  tackle  the  big  questions.  They'll  share their  suggestions  to  help  make  your  post- work  years  the  most  exciting  of  all.

This time, we're turning big dreams into  big  realities.  Whether  you  want  to  travel the  world,  start  a  business,  devote  yourself  to  your  hobby  or  live  the  quiet life,  this  episode  is  for  you. 

I'll  be  back  with  my  retiree  friends  to  hear  their  plans,  then  I'll  be  joined  by Claire  Singleton,  who's  CEO  of  Legal  and  General  home  finance,  and  Kara Gammell,  who's  a  journalist  specializing  in  personal  finance  in  later  life. They'll  be  sharing  their  wisdom  on  how  to  plan  for  the  lifestyle  you  want. Thanks  for  downloading  Rewirement,  The  retirement  podcast  from  Legal  and General.

First,  I  wanted  to  look  at  two  sides  of  the  coin.  Sue  and  Debbie  both belong to  an  amateur  dramatic  group  in  Sussex.  Debbie  has  a  vision  for  retirement, but  it's  a  way  off  yet,  and  she  hasn't  yet  planned  out  the  details.  Sue,  on the  other  hand,  is  managing  her  retirement  day  to  day  with  a  full  and  active social  life  in  a  local  community.

Debbie,  what  is  your  vision  for  retirement,  and  do  you  think  you're  on  track to  achieve  it  right  now?

Debbie: I  don't  know  if  we're  on  track  to  achieve  our  retirement  dreams,  but I  think  we  have  very  specific  ideas  of  what  we  want  to  do.  What  we'd ideally  like  to do, I mean,  we  live  near  the  sea  now,  but  we'd  like  to  live right next  to  the  sea.  And  I  think  in  order  to  do  that,  we're  going  to  have  to  go down  to  the  west  country,  out of  the  way,  where  there's  not  very  many people  around, where  we  don't  have  to  commute  anywhere. 

So  we're  going  to  have  to  downsize,  but  that's  fine.  It'll  just  be  the  two  of us  by  then.  The  kids  will  have  moved  away.  Well,  that's  the  plan.  I  don't know  whether  they  will  have  done.

Shirley: They  always  come  back,  darling.  I  assure  you.

Debbie: Exactly.  So  yeah,  move  down  to  the  west  country.  I  think  even  if what  we've  planned  for  our  pension,  it  isn't  quite  enough  for  us.  I  think  by downsizing,  that  should  give  us  enough  to  actually  start  that  dream.  But  I'm hoping  what  we  have  got  as  far  as  pension  goes,  will  help.

Shirley: What  do you  think  life  would  be  like  if  you  retired  tomorrow?

Debbie: I  think  lack  of  a  regular  salary  would  be  tricky  to  start  with,  but  it's certainly  not  insurmountable.  I  think  if  we  retired  tomorrow,  it  would  be  a culture  shock,  but  I  think  we'd  get  by  and we'd  just  tighten  our  belts  and  go for  it.

Shirley: And  Sue,  were  you  thinking  like  Debbie,  when  you  were  her  age?  If not,  what  are  the  differences  you  see  now,  talking  to  Debbie?

Sue: I don't know.  I  mean,  I  didn't  give  it  an  awful  lot  of thought and  I  didn't actually  have  a  bucket  list  of  things  I  was  going  to  do  when  I  was  younger. Certainly  as  I  came  up  to  retirement,  I  did  then  start  thinking, " Oh,  I'll  be able  to  do  this  and that,  and  get  out  more  and  have  a  bit  more  freedom and hopefully  enjoy  life."  But  we  weren't  thinking  of  moving  home  anyway,  which obviously  Debbie  is.  So  she's  got  far  more  of  a  plan.  Yeah,  I  had  thought of what  I  might  do,  but  not  in  the  detail  that  Debbie  has.

Shirley: Do  you  feel,  Sue,  in  the  last  20  years  though,  people  have  different expectations  now?

Sue: Yeah,  I  think  they  have.  I  think  people's  expectations  are  far  bigger than they  were  when  I  was  younger.

Shirley: Do  you  think  due  to  the  internet  and  the  changing  in  the  whole  of the  life?

Sue: I  mean,  we've  got  so  much  knowledge  now  and  we  can  see  what's being  done  all  over  the  world,  and  it  must  have  an  effect.

Shirley: Do  you  feel  that,  Debbie? Do  you  feel  that's  influenced  you  at  all?

Debbie: I  think  when  I  first  started  out  saving  for  my  retirement,  it  was  a very  different  world,  and  the  only  things  I  had  to  go  on  were  what  my parents  had  done  and  what  their  peers  had  done  and  my  grandparents  and that  kind  of  thing.

Nowadays,  yeah,  there  is  a  lot  more  to  be  seen. 

You  just  go  onto  social  media  and  there's  pictures  of  people  retired,  enjoying themselves.  So  yes,  it  is  very  different  now,  and  you  see  more.  I  don't  know whether  the  actual  world  has  changed  that  much  or  whether  we  just  see more of it.  I  don't  know.

Shirley: So  what  about  our  choir  team,  Marcus  and  David?  In  our  chat, David  told  me  that  when he  retired,  he  spent  the  first  few  years  redecorating the  house  and  writing  a  book.  What  does  Marcus  envision  his  retirement  will look  like?

Marcus: Well,  I  feel  like  I've  been  traveling  the  world  with  my  career  in  a way.  In  some  ways,  I'd  like  to  settle  down  a  bit.  I  think  my  wife  and  I  have a  plan  that  is  not  really  very  advanced  in  our  thinking,  but  I  think  we  would love to have  a  cottage  somewhere  in  the  countryside,  as  well  as  a  pad  in London. 

So  when  the  time  is  appropriate  to  sort  of  downsize  from  the  family  house, if it's  not  wildly  unrealistic  to  trade  that  in  for  a  flat  somewhere  in  London  and then  a  cottage  in  the  countryside.  And  then  the  cottage,  I  think,  would  be the  primary  project.  It  would  become  sort  of  the  focus  of  your  leisure interests,  would  be  around  the  countryside  and  making  roots  in  a  new community  and  looking  after  a  cottage.

David: What  I  heard  you  really  want  is  a  Lamborghini.

Marcus: Well,  I  think  one  of  the  tricks  of  your  retirement  planning  is  not  to let  your  ambition  go  above  your  means.  I'm  a  great  believer... 

I  think  it  was  Charles  Dickens  wrote  something about this in one  of  his  novels, but  I'm  a  great  believer  in  the  philosophy  that  sort  of  satisfaction  in  life  is  to have  a  set  of  expectations  that  is  just  slightly  below  the  resources  available to  you.  It's  when  you  sort  of  come  into  a  bit  of  financial  success  and  then start  mixing  with  a  faster  crowd  and  expect  to  have  all  of  your  holidays  in the  Caribbean  and  to  drive  impressive  cars,  that  you  find  yourself  being sorry for  yourself  of  not  being  able  to  live  up  to  your  means. 

But  if  you  keep  your  expectations  in  check,  then  you  can  be  happy  on  any amount  of  money.

David: I mean,  it  was  the  case  when  the  pension  reforms  that  happened  in the  past  10  years,  gave  people  the  opportunity  to  take  far  more  cash  out  at retirement  age  or  from  age  55  onwards,  that  there  was  this  big  concern  that people  would  blow  it  on  ridiculous  and  unnecessary  things. 

And  from  what  I've  been  reading  recently,  that,  of  course,  there's  an  element of  that.  There's  unfortunately  an  element  of  scamming,  which  has  affected some  people,  but  the  vast  majority  have  been  relatively  sensible  and  those pension  reforms  have  worked  pretty  well.

Shirley: Colin  and  Tracy  are  still  mulling  over  their  future  plans.  Tracy's  done a  lot  of  work  on  a  house  and  lets  out  rooms  to  foreign  students,  which helps  support  her  salary.  How  are  you  going  to  afford  to  have  your  camper van  and  everything  else  that  you're  looking  forward  to  in  your  retirement?

Tracy: Well,  the  thing  is  at  the  moment,  Shirley,  I'm  hoping  early  sixties,  I will have  enough  because  I'm  hopefully  going  to  pay  my  mortgage  off  a  little  bit earlier  by  overpaying,  by  having  all  of  my  lovely  European  students come and stay  with  us. 

I'm  also  hoping  that  my  pension  pots  will  all  add  up  for  early  sixties  so that I will  be  able  to  buy  my  camper  van  and  go  on  holidays  abroad  to  see  the... I  didn't  mention  this  earlier,  but  we've  got  family  in  Spain.

Shirley: Oh, lovely.

Tracy: We've got family  in  India,  and  we've  got  family  in  Wales.  So  my children  are  half  Welsh,  a  quarter  Indian  and  a  quarter  Spanish.  We've  got family  all  around  the  world  that  we  want  to  visit.  I'm  not  feeling  secure  in the  fact  that  I'll  be  able  to  finish  work  and  retire  at  63, 64  to  do  that.

Shirley: But are you  putting  a  little  bit  aside  for  that  dream?

Tracy: It's  all  in  the  house,  Shirley.

Shirley: All  in the house.

Tracy: It's  all  about  the  house,  so  it's  either  early  sixties,  going  to  be  a  case of  downsizing,  or  it's going  to  be  a  case  of  keeping  the  students  coming, and we'll  have  our  students.  We  enjoy  hosting  them.  We  enjoy  sort  of  meeting people  from  different  countries,  different  cultures.  I  would  be  more  than happy to  do  that  alongside  my  retirement,  if  it  means  I  could  retire.

Book  them in  for  certain  months  of  the  year  and  then  go  off,  do  our  little travelling’s other  months  of  the  year,  as  it  were.  I'm  hoping  we  are  on  track, but  I  don't  feel  secure  about  it,  Shirley,  and  I  think  I  do  need  to  get  more advice. 

The  other  factor  is  my  partner.  So  my  partner  has  got  an  NHS  pension, which  is  quite  small  because  he  hasn't  worked  there  for  very  long.  So  it's how  we  managed  to  retire  at  the  same  time.  It  might  be  me,  swanning  off round  the  coast  of  Britain  by  myself,  Skyping  him  while  he's  still  at  work. 

I  don't  know,  but  we'll  have  to  see.  It's  all  a  bit  up  in  the air, but  I'm  hoping everything  will  come  together.

Shirley: I'm  sure  with  your  positive  attitude,  it  will.  I'm  sure.  Colin,  how  are you  going  to  afford  the  lifestyle  that  you  want  during  retirement? Have  you put  something  aside?  What  are  you  going  to  plan?

Colin: Not  really  putting  anything  aside  at  the  moment.  That  was  a  plan  of mine,  was  to  put  a  lump  sum  away  each  month,  and  then  we  could  draw down  on  that  just  as  a  fund  somewhere.  Wouldn't  necessarily  invest  it  in anything  special.  And  we  could  probably  put  away  money  for  five  years  and then  that  would  help  subsidize  our  standard  of  living  for  10  years,  for instance.

I  have  got  these  pension  pots  I've  mentioned,  that  I've  consolidated  and we'll probably  take  some  of  that  out.  We  will  consider  downsizing.

I  think,  given  an  opportunity,  a  part  time  job  or  something  to  help  tide  you through  as  well.  And  not  really  only  for  that  reason,  but  to  still  get  the  sort of  social  contact. 

I  think  if  you've  worked  for  40, 50  years  then  to  suddenly  drop  out  of  that and  just  potter  around  in  your  garden,  you  miss  the  camaraderie  and  the social  interaction  with  people  in  the  working environment.  So  that's  something I  definitely  would  consider  as  well.  We'd  have a little bit  of  teachers'  pension from  my  wife  as  well,  and  then  it  would  just  be  topped  up  with  the  basic state  pension  as  well.

Shirley: Some inspiring  plans,  hopes  and  dreams  from  our brilliant  Rewirees. It definitely  sounds  like  they're  well  on  their  way  to  the  next  adventure.  Now  to tackle  a  few  of  the  questions  that  cropped  up. 

How  do  you  make  sure  you  have  enough  income  to  make  your  plans happen  in  retirement?  What  counts  as  living  comfortably?  And  what  approach to  saving  and  spending  is  best?  I'm  joined  by  Legal  and  General  CEO  of home  finance,  Claire  Singleton,  as  well  as  journalist  Kara  Gammell. Welcome, both,  and  how are  you  both  doing?

Kara: Hello,  thanks  for  having  me.

Claire: Hi.  I'm  well,  thank  you.  Good  to  see  you.

Shirley: So  we  have  some  questions  here  for  you,  and  we'll  start  with Claire. Claire,  when  we  talk  about  retirement  income,  what  does  that  cover?

Claire: Retirement  income  can be  in  multiple,  multiple  sources  for  many people.  And  I  mean,  first  of  all,  many  people  talk  about  retirement  income and  think  of  their  state  pension.  But  many  people  may  also  have  a  private or  a  workplace  pension,  and  people  may  have  some  various  savings  that could  be  in  the  form  of  an ISA  or  a  savings  account  or  other  investments. 

But  increasingly,  people  are  also  considering  the  equity  in  their  home  as  part of  their  retirement  income.  People  may  be  in  a  position  where  they  have paid  off  their  existing  mortgage  already,  or  have  seen  avail  uplift  in  value  in their  home  and  so  have  an  incredible  amount  of  equity  of  which  they  can think  about  using  as  part  of  their  retirement  income.

Shirley: Kara,  how  on  earth  do  you  afford  a  retirement  that  could  last  for 20, 30  or  even  40  years?

Kara: You  know,  this  really  is  the  million  dollar  question  because  after  all, how  can  you  prepare  for  something,  financially,  if  you  don't  even  know  how long  it's  going  to  last?  Most  of  us,  we  have  no  idea  how  long  we  are  going to  live  for.

And  chances  are,  even  if  we  could  guess,  we  would  underestimate  it  wildly. So,  ONS  figures  show  that  a  65  year  old  man  has  a  50%  chance  of  living to  the  age of  87,  and  a  woman  of  the  same  age  has  a  50%  chance  of making  it  to  the  age  of 90.

That's  quite  a  significant  period  of  time  to  cover  with  your  pension.  So  even though  the  uncertainty  can  make  it  difficult  to  plan,  the  best  idea  is  to  try and  save  as  much  as  you  can,  to  ensure  that  you  have  a  secure retirement, cause  you  need  that  income. 

You  need  to  keep  food  on  the  table  and  a  roof  over  your  head.  It  depends on  what  type  of  lifestyle  you  want,  but  also  how  much  money  you  have coming  in,  in  the  lead  up  to  retirement.  So  the  best  thing  to  say  is,  save  as much  as  you  can.

Shirley: Keep  saving.  And  when  you've  saved,  keep  saving  some  more?

Kara: Exactly.  And  the  earlier  you  start  the  better,  but  it's  never  too  late  to get  started.  Anything  is  better  than  nothing.

Shirley: Okay.

Kara: Lots  of  unexpected  life  changes  can  have  a  massive  impact  on  your retirement  income.  You  know,  life  will  have  its  ups  and  downs  and  often those  are  beyond  your  control.  The  only  thing  you  can  control  is  how  you react  to  those  changes. 

So  whether  it's  divorce  or  ill  health  or  a  bereavement,  these  can  sideline your  pension  savings. 

Even  the  best  plans  can  go  to  pot,  frankly.  So  you  always  want  to  have  an alternative.  So  whether  it's  protecting  your  income  with  insurance  while  you're working,  so  that  you  can  still  have  your  salary  in  order  to  contribute  to  your pension  fund,  or  if  it's  you  getting  divorced,  you  need  to  look  at  a  pension.

It's  not  just  about  who  gets  the  house,  but  who's  going  to  get  the  pension , or  part  of  it  anyway,  and  also  having  a  will  in  place.  So  if  you  do  have  a bereavement,  that's  one  less  thing  for  you  to  worry  about.  You  can't  stop these  things  from  happening  necessarily,  but  you  can  at  least  try  and  make sure  that  you're  ready  in  case  they  do.

Shirley: Claire,  let's  talk about  the  term  lifestyle.  What  do  we  mean  by  that, and  what  does  a  comfortable  lifestyle  look  like?

Claire: Yeah,  I  mean,  it's  an  interesting  question  because  lifestyle  means  a very  different  thing  to  different  people. 

People  have  various  different  plans  and  aspirations  for  their  lifestyle and  for their  lifestyle  in  retirement.  We  look  at  various  scenarios. 

Your  lifestyle  can  very  much  depend  on  whether  you're  single,  married, divorced,  whether  you  have  children.  And  there's  been  various  interesting analysis  on  living  standards.  And  so  we  typically  look  at  it  in  different buckets.

We  look  at  the  home,  which  includes  your  bills,  your  maintenance,  costs  of decorating  a  category  of  food  and  drink.  So  basically,  your  weekly  allowance and  weekly  shop,  eating  out,  and  then  a  category  of  transport.  Do  you  own a  car?  Do  you  have  other  transport  needs? 

Then I look at  a  bucket  of  holidays  and  leisure,  and  then  clothing  and  gifts and  helping  others.  In  general,  we  would  say,  from  analysis,  that  if  you're  a single  person,  to  have  a  relatively  moderate  standard  of  living  in  retirement, you  need  about £20, 000  a  year.

For  the  minimum  standard  of  living,  you're  looking  at about £ 10,000  a  year. And  then  if  you  want  a  more  comfortable  standard  of  living,  that  goes  up  to around £33, 000  a  year.  Now,  clearly  that  very  much  depends  on  your personal  circumstances  and  exactly  where  you're  living  in  the  UK.  But  clearly there  is  a  decent  amount  that  is  needed  on  an  annual  basis  to  have  a decent  standard  of  living.

It's  really  important  that  people  divide  their  spending  when  they're  thinking about  saving  into  essential  and  nice  to  have. 

So  it's  good  to  consider  your  pension  fund  and  a  guaranteed  annuity  and income  from  say,  your  state  pension  or  a  pension  that's  turned  into  an annuity  on  top  of  that,  into  your  essential  living  costs. 

So  to  make  sure  that  you  can  cover  your  essential  living  costs,  and  then we would  recommend  using  savings  and  other  income  to  fund  that  nice  to  have.

People  also  need  to  have a  think  about  what's  their  preference  in  terms  of leaving  a  legacy?  So  do  they  have  loved  ones  that  they  want  to  pass things on  to  when  they  die,  or  actually  would  they  prefer  to  have  a  living  legacy? 

So  would  they  prefer  to  pass  some  of  that  intergenerational  wealth  on  while they  can  still  see  the  benefits  of  that?  Different  people  have  different preferences  and  different  scenarios,  but  it's  definitely  something  that  we would advise  thinking  about  early.  So  I  know  Kara  has  talked  about  saving,  but  in terms  of  how  much  you're  saving  and  what  that's  for,  we  would  definitely recommend  thinking  about  what  your  future  wishes  would  be.

Shirley: Claire,  lots  of  people  see  retirement  as  a  chance  to  tick  things  off the  bucket  list  and  do  the  things  they  didn't  have  time  or  money  for  when they  were  younger.  Do  you  need a lot of  money  to  do  these  things realistically?

Claire: Yeah.  I  mean,  it's  all  about  for  planning  on  that.  So  yes,  absolutely, people  know  I  have  increasing  aspirations  for  retirement,  and  really it  is thinking  about,  what  are  those  and  how  quickly  do  you  want  to  do  them? 

And  how  much  of  saving  do  you  have?  I  mean,  we've  seen  quite  a  lot  of aspirational  purchase  or  things  in  retirement.  I  work  in  a  business  where  we provide  lifetime  mortgages  and  we  see  people  taking  a  lifetime  mortgage, really  to  fulfill  some  of  that  bucket  less  often.  So  we  see  36%  of  people take  a  lifetime  mortgage  to  refurbish  their  home. 

17% of  it  take  it  to  go  on  holiday.  15%  of  people  take  a  lifetime  mortgage to help  a  family  member  with  a  deposit  on  a  house.  So  really,  people  are using lifetime  mortgages  to  be  able  to  fulfill  their  bucket  list.

Shirley: Kara,  we're  talking  about  making  positive  plans,  but  should  we  have a  backup  plan  for  when  the  unexpected  happens?

Kara: Absolutely.  I  think  it's  crucial  to  have  a  backup  plan  because  so  many things  can  go  wrong  in  life,  whether  or  not  you  expected  them  to  or  not.  So whether  it's  your  health,  I  mean,  you  might  assume  that  you  can  work  on until  your  seventies. 

But  you  don't  know,  you  may  have  poor  health  and  have  to  stop  working  in your  early  fifties,  and  that  would  massively  have  an  impact  on  how  much you're  able  to  put  away  into  your  pension. 

But  also,  it  means  that  you  have  to  be  able  to  cover  all  your  bases,  and the  best  way  to  do  that  is  to  have  a  plan  in  place,  and  then  a  backup  plan on  top  of  that.

A  plan  is  fairly  pointless  if  you  don't  keep  it  updated.  So  you  need  to  think of  it  kind  of  as  a  roadmap.  If  you  went  on  a  trip,  you  would  take  the  map with  you,  but  you  would  check  it  often.  If  you  encounter  traffic  or  an accident on  the  roads,  you  would  maybe  go  another  way.  Retirement  is  very  different than  what  it  used  to  be  in  the  past. 

They  say  70  is  the  new  60,  and  suddenly  you  find  yourself  in  a  position where  you  don't  need  to  work  because  you  can  take  your  retirement  and you  have  your  health.

So  suddenly,  you  have  all  this  extra  time.  You  want  to  have  some  money  to be  able  to  enjoy  yourself  while  you're  at  it.  I  think,  you  know  what?  I've done  my  living  like  a  pauper  days,  and  that's  when  I  was  a  student  and fresh  out  of  journalism  school.  I  do  not  want  to  do  that  when  I'm  in  my seventies. 

I  want  to  be  able  to  enjoy  myself  and  travel,  and  who  knows  where  my daughter  will  live?  You  know,  I  want  to  be  able  to  the  most  of  it,  because  if I'm  lucky,  I'll  live  for  a  very  long  time. 

When you  look  at  my  father,  who's  71,  and  compared  to  what  my grandfather was  like  at  71,  30  years  ago,  the  difference  in  their  lifestyles  is  huge.  And my  parents  are  having  a  whale  of  a  time.

Shirley: What  happens  if  you  get  partway  through  your  retirement  and  realize you're  going  to  run  out  of  money?

Claire: Yeah.  I  mean,  clearly  we  would  firstly  say,  try  and  plan  and  save  as much  as  you  can  to  avoid  that  happening.  But  I  think  what  you  need  to  do really  is  budgeting  is  very  important. 

It's  really  important  to  look  again  at  what  is  essential  versus  nice  to  have, and  make  sure  that  you're  very  clear  on  what  you're  doing  with  your finances  there. 

Then  also,  there are various  options  for  people.  Clearly  they could downsize, so they  could  move  home  and  downsize,  or  they  could  look  at  a  lifetime mortgage. 

Taking  a  lifetime  mortgage,  gives  people  lots  more  flexibility.

It's  an  option  for  many  people,  but  it  requires  serious  consideration  and advice.  But  I  just  thought  I'd  talk  through  some  of  the  pros  and  cons  of taking  a  lifetime  mortgage.  So  you  can  take  a  lump  in  one  go  and  that's tax free  cash. 

You  can  either  take  it  in  a  lump  or  you  can  choose  a  more  flexible  way  to take  that  money.  So  you  can  take  it  in  smaller  sums  as  you  wish.  You  can spend  that  money  as  you  would  like  in  terms  of  home  improvements,  or  I think  we've  talked  about  helping  your  loved  ones  get  on  the  property  ladder. 

You  can  choose  how  you  repay  a  lifetime  mortgage,  so  you  can  choose  not to  make  payments,  or  there  is  options  where  you  can  actually  choose  to pay the  interest  during  the  lifetime  of  that  loan.  So  there  is  flexibility  around a lifetime  mortgage.  You  can  also  obviously  stay  in  your  home,  which  is  really important  to  people.

So  you  don't  necessarily  need  to  downsize.  When  sometimes  people  think that  they  might,  you  have  the  benefit  of  still  staying  in  your  property. 

There  is  also  a  no  negative  equity  guarantee.  So  no  matter  what  happens, you'll  never  repay  more  than  the  value  of  your  home when  it  was  sold  which is  really  good  protection.  And  you can  also  think  about,  in  terms  of inheritance  protection.

If  you  did  want  to  pass  on  a  certain  amount  from  your  home,  there  is  an option  to  look  at  inheritance  protection  around  the  product  as  well.

But  it  is,  as  I've  said,  something  that  people  need  to  consider  in  depth. There  are  clearly  some  negatives  that  people  need  to  think  of  as  well,  which is,  it  does  often  reduce  the  inheritance  that  you  will  be  passing  on.

I  know  we've  discussed  inheritance  and  expectations  a  little,  but  it  is definitely  a  key  consideration.  Clearly,  you  pay  interest  on  a  lifetime mortgage and  that  can  build  up.  So  people  need  to  look  at  how  much  that  interest  is that  rate  of  interest,  and  really  understand  that. 

If  you  did  want  to  repay  that  mortgage,  there  is  often  a  repayment  charge. So  you  need  to  understand  that  repayment  charge,  and  also,  you  should look  at  it  and  seek  legal  advice  or  financial  advice  around  any  impact  on any  of  the  other  benefits  that  you  might  be  receiving. 

So  there  can  be  an  impact  on  some  of  the  means  tested  benefits.  Those are  the  things  I  think  people  need  to  weigh  up  when  they're  considering  a lifetime  mortgage.  I  mean,  it's  important  to  note  that,  on  our  products,  we also  offer  downsizing  protection. 

So  if  you  took  a  lifetime  mortgage,  but  then  you  did  want  to  consider  your options  later  down  the  line,  it  is  possible  to  move  your  lifetime  mortgage with you,  if  your  new  property  meets  the  relevant  criteria.

Shirley: Tracy  talked  about  all  her  money  being  in  the  house.  She's extended it  and  rents  to  students.  What  are her  other  options?  Is  downsizing  the  best way  forward  to  free  up  cash?

Kara: I  think  a  lot  of  people  worry  about  when  it  does  come  to  retirement, that  they  will  have  a  pension  pot  of  money  and  they  need  to  make  it  last. And  suddenly,  if  you're  not  working,  you  feel  like  you  don't  have  any  extra money  coming  in  and  it  must  be  quite  overwhelming. 

The  good  news  is  that  you  always  have  options.  You know,  there  are  other ways  that  you  can  supplement  your  income.  We  always  say,  in  the  industry, always  make  sure  you  do  a  benefits  check.  You  might  be  really  surprised what  you  may  be  able  to  claim.  Each  year, £ 3. 5  billion  pounds  worth  of benefits  go  unclaimed  by  older  people.

And  you  never  know  what  you  may  be  able  to  get.  And  you  know,  every little  bit  helps.  It  makes  sense  to  spring  clean  your  finances  every  year. 

Make  sure  you  look  to  change  your  energy  bills,  your  insurance.  Those  two things  alone  can  save  you  hundreds  of  pounds  a  year.  Loyalty  does  not  pay any  more  when  it  comes  to  your  utilities,  so  make  sure  that  you  shop around.  Set  a  note  in  your  diary  and  keep  a  tally. 

It's  very  satisfying.  I  like  to  think  of  it  as,  I've  given  myself  a  bonus,  when  I see  how  much  I've  saved,  and  then  treat  myself.

Also,  if  you  have  several  rooms  empty,  yes  you  can  take  in  a  lodger. Students  or  people  that  commute  for  the  week,  under  the  government  rent  a room  scheme,  you  can  earn  up  to £ 7500  a  year  tax  free,  and  that  can  be a nice  little  boost  to  your  bank  balance.

Another  option  is,  other  than  just  renting  out  spaces  in  your  home,  why don't you  look  out  in  your  driveway?  If  you  have  a  nice  big  driveway  or  even  a parking  spot  that's  going  spare,  you  can  actually  rent  that  out  and  make some  serious  cash.  Commuters  are  desperate  to  find  parking  places  near the train  station.  Trust  me.  You  can  do  so  on  this  called  justpark.com,  or yourparkingspaces.co.uk. 

And  depending  on  if  you're  away,  or  it's  empty  and  you  don't  drive,  it's  a nice  little  earner  for  you.  There  are  lots  of  options.  You  just  have  to  get  a little  creative.

Shirley: Many  people  want  to  leave  an  inheritance  for  children.  Do  you  think that  children  still  expect  this?

Kara: This  is  a  really  interesting  one  for  me,  because  where  I'm  Canadian and  I  moved  to  the  UK about  20  years  ago,  and  nobody  expects  to  inherit anything  at  home,  it  seems  like. 

So  when  I  came  to  England,  it  seems  quite  surprising  that  people  expected to  inherit  money  or  parents  expected  to  leave  significant  lump  sums  to  their children. 

Yes,  it's  probably  something  that  maybe  might  be  changing  a  little  bit because  people  are  living  so  much  longer  now,  their  seventies.  It's  called skiing.  So  spending  the  kid's  inheritance. 

You  want  to  go  out  and  enjoy  your  money  because  you  have  your  health, where  30  years  ago  in  your  seventies, and  it  could  have  been  a  different lifestyle.  So  I  think  a  lot  of  people  in  retirement  are  asking  themselves  if they  can  have  a  balance,  maybe  leave  some  and  still  enjoy  themselves.

But  a  lot  of  people,  a  lot  of  parents,  older  generation  are  leaving...  They  like to  pass  the  money  on  while  they're  still  alive  to  help  people  get  on  the property  ladder.  The  younger  generations  are  struggling  with  massively  high rent  bills. 

They  can't  also  rent  a  property  and  try  and  save  to  get  on  the  property ladder.  So  that  money  really  can  come  in  handy  when  they're  younger,  as well.  But  at  the  same  time,  I  don't  think  that  anyone  should  assume  that they're  going  to  inherit  anything. 

While  it  would  always  be  nice,  I  don't  think  it's  your  right,  but  I  do  think  it's much  better  to  discuss  it  before  the  will  is  read  out.  It's  hard  enough grieving  a  loved  one  and  then  find  out  there's  nothing  left  to  pay  the  funeral bill,  for  instance,  would  be  very  disappointing.  Let  alone  no  cash  lump  sum.

Shirley: I'll  tell  you  this  funny  story.  When  my  son  was  about  19  and  got  on Dancing  With  The  Stars  in  the  United  States,  I  said, " By  the  time  you're  25, Mark,  you  need  to  think  about  owning  your  own  apartment."  I  said, " No matter  what  you  save,  I'll  match  it."  I  should  never  actually  have  said  that. At 24,  he  came  to  me  and  said, " Mummy,  I'm  ready  to  buy."  And  said, " This  is what  I've  saved."  I  nearly  fell  over.

Kara: That backfired.

Claire: You  encouraged  him  to  say  it,  so  that's good. Good on you.

Shirley: It  sounds  like,  whatever  your  personality  and  plans,  there  are  some clever  things  you  can  do  to  manage  your  money  during  retirement  and  still make  this  period  of  life  a  great  adventure.  If  you're  a  planner  like  me,  or  a worrier,  then  hopefully  that's  put  your  mind  at  rest  and  given  you  some inspiration  for  the  next  steps.  I  still  love  that  campervan  by  the  coast  idea.

You can  find  out  more  about  retirement  planning  at  legalandgeneral. com/ retirement.

In  our  last  episode,  we'll  be  diving  into  an  emotional  topic;  how  to  share money  with  others  in  your  retirement. 

Whether  you  want  to  leave  an  inheritance,  or  support  loved  ones  whilst you're  still  around  to  enjoy  it  with  them,  we'll  be  asking  the  important questions  once  again.

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