Deprivation of assets if you go on holiday?

No one should EVER criticize you for spending your money the way you want!

Not sure about that. Talk to the lady posting about her DH running up huge debts as a result of which they have missed mortgage payments and now have to sell their house and have to leave a home she loes and has lived in for 25 years.

I can think of lots of other occasions where someone's decisions on how they spend their money, without any regard for those they support, has caused poverty and want for the rest of their family.

No one should EVER criticize you for spending your money the way you want!

Everyone’s situation is different. You sound like a reasonable person and understand your limits and live within your means.

If you are still working, traveling on occasion is good mental health too. Go on a break every now and then.
Fie on anyone criticizing!! Petty people.

undines

Goodness! How old or infirm do you have to be before you are not allowed to give money away? I've just 'lent' my son a goodly sum towards his new house, following his divorce. I'm 73 and working full time - I never dreamt there would be any question that I could not give my money to anyone I wished!

You can give away what you want when you want, sorry to be morbid but it could incur inheritance tax if you die within seven years of gifting the money, the amount due is on a sliding scale
www.gov.uk/inheritance-tax/gifts
You can also gift £3000 a year without any tax implications.

They seldom look and in any event you can spend your own money as you wish. We can't live our later lives worrying about every penny we spend in case the LA might object further on down the line!
Even if they looked back they are only seeking large amounts given to family, or house put into someone else's name.
When we were in this situation the LA took our declared funds at face value ... for all they knew we could have recently sidelined millions! ... I wish!

Whilst I would agree that someone in good health aged 62 does not need to be concerned about DoA, and should certainly take a holiday that suits their overall budget, I would just point out that local authorities are the ones who pay the care costs ( including care at home) of people without savings or available property, and there is no limit how many years they can go back, though deliberate intention has to be shown. There is also often confusion with the seven year limit that applies regarding IHT and the giving of gifts. Totally different fields.

The rules on Deprivation of assets only come into play if someone is otherwise in need of state funded care. A working 62 year old in good health does not have to worry about this.

NotSpaghetti

I would encourage you to go and have a most fabulous time!
🚢 ✈️........ 🌴🍹

Absolutely, and come back on here and tell us all about it.

Who looks into it anyway?

? i thought this restriction only came into play if you were ill or disabled, or had a serious accident, and it was reasonably foreseeable that you might need care in the future ?
am i broadly correct in that assumption ?
(i am not talking about any poss tax liabilities, just regarding deprivation of assets rules.)

I would encourage you to go and have a most fabulous time!
🚢 ✈️........ 🌴🍹

Germanshepherdsmum

Bloody hell, the OP is 62 and expecting to work until 75. Who knows if she will reach that age and pay off her mortgage, though I sincerely hope she does. She wants a holiday. Let her have that without all the criticism about paying off her mortgage instead. I hope she has her holiday. We never know what’s round the corner. Today might be our last so carpe diem. You’re a long time dead.

I was going to post a very similar comment. Go and enjoy yourself OP.

Bloody hell, the OP is 62 and expecting to work until 75. Who knows if she will reach that age and pay off her mortgage, though I sincerely hope she does. She wants a holiday. Let her have that without all the criticism about paying off her mortgage instead. I hope she has her holiday. We never know what’s round the corner. Today might be our last so carpe diem. You’re a long time dead.

I think it depends on what type of holiday it is going to be , if it’s a long haul flight & you aren’t able to save then maybe .
But just to dip into your pension pot for annual holidays is not ideal as I am thinking that if you are currently working and are 62 but still have a mortgage which you will be paying until aged 75 then it’s seems a bit fool hardy . As to me that is indicating that you won’t have much of an income when you retire .
Surely the better thing to do would be to reduce your mortgage now giving you the ability to save for your holidays & car & house repairs etc .
There are lots of good offers for holidays & you could always sign up to one of these sites where you look after someone’s house & or pet while they are away here or abroad 👌

You're only 62, just do it.

If you are thinking of giving a significant sum of money to someone - a child or grandchild and they are on benefits, be careful to check whether it will affecct their benefit entitlement .

Some years ago I dealt with a case where an elderly lady received an unexpected large legacy. She was advised to put some of it in a financial product for each of her adult sons, one of whom was on universal credit. Even though this product would not pay out for 10 years, early redemption would mean he lost a good part of it, he still had his benefits reduced considerably as he now had assets over the maximum allowed without a reduction in benefits.

If you go on holiday expenditure will not be considered deprivation of assets. Go and enjoy your holiday. I used to assess people's care costs liability.

That is incorrect advice. Age UK explain it here:

www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/

They say:

It’s not just giving away your money that could be seen as a deliberate deprivation of assets. Different ways of reducing your money or property could count too, including:

• giving away a lump sum of money, for example as a gift

• suddenly spending a lot of money in a way which is unusual compared to your normal spending

• suddenly spending lots of money on living in an extravagant way, such as gambling

• transferring the title deeds of your property to someone else

• using savings to buy possessions, such as jewellery or a car, which would be excluded from the financial assessment

• using your assets to buy an investment bond with life insurance

• putting your assets into a trust that they can't be removed from.

If the local council thinks that you have deliberately reduced your assets to avoid care fees, they may still include the value of the assets you no longer have when they do the financial assessment.

Deprivation of assets only comes in if you give the assets to someone else, a relative usually, there is no actual time limit so be careful the council will try to recover cash or property you give away to pay for your care.
Otherwise you are free to spend it as you wish, holidays, a new car, gambling, once it’s gone they cannot do anything about it

You are entitled to spend your money in any way you wish! Talk about deprivation of assets only applies when it looks likely you're going to need care. Enjoy your well earned pension pot! Just make sure you only take out enough to keep you under the next tax band

I think you're asking about using some of that 'pot' for a holiday?
I guess that would depend on the type of holiday you have in mind.
A weekend in the country or a small trip to take in some entertainment event need not be expensive.
If you're thinking of something more expensive, maybe ask yourself how comfortable you would feel on this vacation while worrying about what's left in that 'pot'.
Good luck to you~~

Only a very small proportion of people end up in a care home. 😉

Altyann

My thoughts are always pay off debt/mortgage, depending on the rate you're on will save more.

I agree with this, you can never be sure how long you will be able to continue to work. If you can reduce your mortgage you can pay a little more into your pension which will benefit you in the long run.
Personally I think that expensive holidays are over-rated but each to their own.

No ,it is ok,providing you don't go on a tesla rocket flight! Deprivation of assets usually applies to people who are not super rich, Its too well published what the rich do with the money that was mainly robbed off the workers in the first place, 50 trillion dollars in offshore accounts is a loose figure that is banded about, and that doesn't include the black economy.......

Goodness! How old or infirm do you have to be before you are not allowed to give money away? I've just 'lent' my son a goodly sum towards his new house, following his divorce. I'm 73 and working full time - I never dreamt there would be any question that I could not give my money to anyone I wished!

Germanshepherdsmum

You have to live, and using some savings for a holiday is not unreasonable as you can’t afford it out of income. Same with house repairs or improvements or buying a car. Deprivation of assets is giving money or other assets away when you know you might need care. You’re only 62 and expect to work until you’re 75. Don’t worry, and enjoy your holiday!

I completely agree, it would be if you went on a world cruise and drained your entire savings or gave it away.