- May 5, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Considering a Lump Sum Offer in Divorce Settlement
As I navigate through the divorce process, one option that has been presented to me is receiving a lump sum of money instead of sharing retirement funds and savings. This decision comes at a time when I am also evaluating my living situation, as my current residence is rented and may not be a long-term solution.
## Need for a New Residence
Given that I need a place to live and anticipate having my grown children visit me frequently, finding a suitable home is a top priority. Furthermore, my job in London requires me to work late hours, making accessibility to public transportation a crucial factor in selecting a new residence.
### Financial Considerations
Despite not having significant savings, I have the opportunity to secure a mortgage of up to £100k due to my low salary. With this in mind, I have been contemplating purchasing a modest property in a tranquil neighborhood near a train station. It is important to note that I do not drive, making proximity to public transportation even more essential in my decision-making process.
#### Seeking Clarity
As I weigh my options and consider the feasibility of this plan, I find myself questioning if this is a realistic goal or if I am simply building castles in the air.
Utilizing an AI Legalese Decoder can significantly help in this situation by providing insights into the legal jargon and complexities of the divorce settlement, making it easier for me to understand the terms and implications of opting for a lump sum payment. Additionally, this tool can assist in evaluating the financial implications of purchasing a new property and navigating the intricacies of obtaining a mortgage with limited savings and income. By leveraging this technology, I can make more informed decisions and ensure that my interests are protected throughout the divorce process.
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Have you had legal advice? You need to be sure that the lump sum is equal to the value of the pension you’re giving up rights to – it often isn’t.
you might be able to get a place without a mortgage even. The benefits of having your own place would be that you are immune to future rent rises.
You wouldn’t be buying so much as an investment you hope to grow as a investment in your own securtiy.
Keep in mine if you are a completely first time property owner, which you might be, given you are renting at the moment you also wont pay stamp duty on any property up to £425k so you really want to stay below that level.
all of this also depends on the current state of your other finances such as any pension etc.
Whether the £450k is a good deal or not for you, I won’t comment further.
What I would suggest, depending on your ties to the area. Why not look at moving g further out and getting a job closer to your new home and get a cheaper property?
Take the opportunity to own your home, benefit from reduced expenses and reduce any commuting. Healthcare positions are plentiful. With the reduced expense of no rent. You could event try bank work and increase your income to boot.
The DB pension is worth sticking with mind you but you should be able to move within the NHS.
450k lump sum now, might be paying out a proper decent yearly income by the time you retire…maybe pop it into a pension calculator.
Then you need to work out if giving up x amount of income for your retirement now is worth it ie. equal to the rent you’ll save and how much the property will appreciate hopefully.
You need proper advice on the maths really. Although peace of mind is obviously massive to consider!
Definitely buy a 2 bed house, it will mean security for life and no rent ever more.
Consider moving jobs outside of London, so you can get something in a nice, safe location. Band 2 NHS is quite low-paid, so you will likely be able to get something similar paid anywhere, and it sounds like you’re not that far off retirement anyway.
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Please go find yourself a pension on divorce expert who will write the pair of you a PODE report which identifies all the pensions you both have and gives details of a fair split to be taken into account for your financial settlement.
Not to be blunt but why are you commuting to London on such a low salary as to only afford £100k mortgage?
Why not buy in a cheaper area and move jobs?
I’m not suggesting Sunderland but for example where I live SE England a nice 2 bed semi may cost £300k right now
Train to London is 1hr20 so not really great for commuting, but will keep you close to your kids
I think buying is a great idea but I’d look to spend £300k, 50k on improvements/modernising to see you into older age, then 100k for investment so you aren’t destitute
Buy elsewhere for half the price and get a job at Asda
Depending on which trust you’re based at, I’d suggest buying a flat outright somewhere in south London. Around Sydenham could be a good option because there are train and London overground options and a car isn’t necessary. Just make sure you’ve kept on eye on any ground charges, etc. in that area there will be some flats in subdivided victorians that will be share of freehold instead of leasehold, which gives you a little more control.
Definitely do able OP. Buying a home cash is the dream depending on where you could possibly get a 2 bedroom place for around that money in London or possibly lower further out and depending how far you’re willing to commute.
If you manage to find something you like for a lower price then I strongly suggest you set the rest aside in personal pension.
Or if you have a pension through your employer you can stick it into that. You can put up to 60k a year into your work pension. I’d also suggest you try and put as much as possible away into your pension to build up for your retirement
How much of a pension do you have already? I think that’s a pretty crucial piece of information, for comparison.
Have you worked out the loss on the retirement aspect as it has had tax benefits attached and continues to have them. How does that link to your own retirement needs as you need an income even if you own a property as it has costs.
Have you thought about long-term leasehold? There are still some agencies that offer this. You wouldn’t own the freehold, but could buy yourself a leasehold for lets say 125 years (fills up your lifetime and that of your children at least). Within that timeframe and according to your contract you could be the only one living at the property. You’d essentially pay something between 100k-200k and have your own place for 125 years after which your children could either extend or vacate the property.
You could buy a new/almost new 3-4 bed house where I live in a nice small market town in a rural county with fantastic beaches a 10 minute drive away outright in cash with £200k left over so you could easily semi-retire or get a part time job. The only fly in the ointment is it’s 200 miles from London. Depending on how often you see/want to see your grown up children this may or may not be an issue.
If you’re willing to take your time to look and do a little bit of work, I believe you can probably find somewhere on the outskirts of London for @ £400-420k.
Of course it goes without saying that you will have to be flexible on your areas and type of property.
have your kids settled and had family of their own? is that something you can see happening in the near future in london or are they likely to settle elsewhere? may be worth considering if you want to be near them?
You can get house with garden on out skirts of London for like 300k-350k decent house as well. Leaving you with 150k-250k savings.
Potentially look at the yields.
A mortgage rate lower than a savings rate, you could make gains in the next 10-15 years.
Also, is it worth looking out of London now ?
£450k will go a long way in the midlands. You could get a very nice house for £200k, change work location and have £200k+ left over to put into your pension.
I would definitely have a solicitor. When my parents got divorced my dad was trying to do the usual deprivation of assets type move. Luckily my mum had an excellent solicitor who wasn’t cheap but fought for a good share. She too was a stay at home mum.
Let’s just say my mum got a hefty sum of his pension amongst a share of other assets and she’s more than comfortable. I’m on a good salary and let’s just say her take home a month is near enough my take home with state pension.
She was also advised with the lump sum she got from the pension share to buy a pension annuity with it and it must have inflation protection as it goes up with inflation too. Although I think you are too young to use the money for that. But if you share then retirement fund then I imagine it works out that with your share of his pension you can do what you need with it come retirement.
No man likes to give up his money in a divorce… so for him to give £450k up which isn’t a small figure by any means, may mean he has much much more and you’re being lowballed as others have said! A good solicitor would fight for your share!
Also I would definitely look at property prices and areas etc and plan for your future retirement. Would you be looking at getting a property valued less than £450k and investing some of the leftover? You could potentially be mortgage free for less than £450k and still commute cheaply, plus have money leftover for savings/retirement. I live in a zone 6 of London, 10 min bus ride to a tube or Lizzie line station and my well sized maisonette with big garden was £300k.