Does my financial advisor know something I don't?

Regarding gifting to relatives you can give as much as you like (unless you are doing it with the intention of avoiding paying care home fees which is another matter).

The ‘rules’ are to do with inheritance tax where it’s possible that the relatives would have to pay some inheritance tax if the gifts were given within 7 years.

From what I have observed personally, those who do the inheriting have not problem with spending it. So go on a splurge!

Annsixty, only half your joint capital should be taken into account when assessing fees for your DH. Surely that should leave you enough to pay household bills? As your DH is fee paying he will qualify for Attendance Allowance, which can go towards the fees. You do not lose all your joint savings, there is an amount of his that can be kept, and none of yours should be taken into account. Have a look on AgeUK website for more information.

Don't end up like me
My H and I saved for a good pension and money for old age.
3 weeks ago my H who now has dementia, went into a care home.
When the fees are paid I will struggle to pay bills.
I will get no help until our savings have gone, then I can apply for benefits.
I have never needed help before and never expected to.
Spend sensibly on what you want and need before it is too late.

Be careful about gifting money to your relatives.
There are strict rules on how often, how much and so on..
Apart from that, have fun spending!

Exactly right Davidhs, there is little point in saving for retirement and then not enjoying it. Agree that there is no need to waste money on replacing a five year old car, but do get out the travel brochures, do the long haul trips while you are fit enough ( and can get the insurance!).

Accountants always advise you to spend and enjoy the money while you are still fit enough to enjoy it.

Being comfortable, taking sensible holidays, gifting to children is entirely reasonable, if you don't spend it any money and any house value you have, will either go on care home fees or given away in your will.

Maybe its to do with how poorly he is expecting sterling investments to perform this year and doesn't want to get the blame at next years review?

There are no tax implications, I don't have enough income to worry about higher rate tax. Most of my money is in a tax efficient pension fund or tax free ISAs thanks to his canny advice. Without that, I would have much less in savings.

I think he just wants me to have a good retirement having worked hard most of my adult life. He says you have saved enough for your retirement now spend it.

There is no risk of me becoming miserly and afraid to repair my house or heat it properly, it's just that I cannot bring myself to waste money! I was thinking of changing my car but I love the one I have and it is only five years old, I don't hanker for a flash model with all the latest gadgets.

Now, where are those holiday brochures!

Problem about gifting to children is that if they divorce ..... which happens often .... wife/husband takes 50% of your money, Lol! Happened to me ..... shan’t be gifting any more!

When I worked for a charity for the elderly I was amazed the number of older people who having saved during their working years to ensure they had enough to money for a rainy day, wouldn't spend any of it, even when there was so much rain the house was flooded. I am not talking of people on tiny incomes with tiny nest eggs, but often people, who had reasonable incomes and quite large sums tucked away.

I would visit them in their freezing uninsulated houses, in need of redecoration and point out that although they could qualify for certain benefits on income grounds, they were excluded because they had too much in savings. I would say that if they used their savings to do the things to the house they were complaining they couldn't afford to do, it could lead to help with Council tax, or qualify for some pension credit. They would never countenance it because that was their savings against a rainy day.

I suspect this advisor is trying to make sure the OP is comfortable with the idea of using odd sums of money to do things, whether a holiday or house repair, so that she doesn't get into this live in misery rather than use some of my savings mind-set.

There are no pockets in a shroud.

I don't begrudge 'the taxman'. Paying the right taxes is my civic responsibility to other people. I'm often unhappy at Scottish govt spending priorities but that's another matter.

I remember spending beyond myself years ago to avoid paying 45% tax ! Needless to say it wasn't difficult to do. No government/taxman was going to get half of my money

It must be re tax/ inheritance stuff. I was surprised how much I ended up having left after I retired. It's amazing how much you don't have to spend and that adds up over time. Thrift was dinned into me by my grandmother!

Is he thinking of tax implications or inheritance tax?

Just curious, why did he tell you to reduce your investments?

Ha ha! Perhaps he’s clairvoyant! Alternatively he may just be a nice man with wise advice...enjoy your retirement