The Elderberry Phone

I have had a series of calls on my mobile from a number which I did not recognise. When I finally managed to answer the phone in time to catch the caller (does anyone else have the problem of the phone always stopping ringing just as they find where it is and push the button?) it was my mobile network. After kindly asking how I was today ( another aside – anyone of the right age to use this website would probably answer ‘Very well, thank you’ whereas the current fashion is to reply ‘Good’. That sounds to me more like a matter for others to comment upon, rather than for someone to judge about themselves. Still, back to the topic.) he asked whether I was coming to the end of my mobile contract.

The first odd thing is why did he ask me something which he clearly knew? I have no idea when my contract ends, it does seem to me one of the least important aspects of my life, but he obviously had my date in front of him. Obviously the network worries that I will be rushing around looking for another supplier, so the aim of the call was to keep me locked into the network.

The next oddity is that he then started to offer me inducements to stay, when I would have done nothing about it if the call had not been made. The first inducement was that he could offer me a new phone. Now, I quite like my phone. After 18 months I think I have figured out how most of it works, or at least how enough for my needs works. I haven’t made a video with it, but then nor have I made a video with anything else. It just rings, rather than having an amusing ring tone. The other day the predictive text slipped into Afrikaans, which made for some challenging words, but mostly I like it. It is a Blackberry, although for obvious reasons I tend to refer to it as an Elderberry, and I use it to be able to see emails when away from my computer. A few calls, a few texts, and at the moment rather a lot of emails about Viagra.

I asked why I should want a new phone, and the answer was ‘Well, 18 months is a long time to have the same phone.’ This seems a strange attitude, especially in a world where we are supposed to be trying to conserve resources, re-use plastic bags, and certainly not throw away expensive high-tech items simply because we are a bit bored with them.

This stems from the fact that mobile phones are a fashion item for the young, and for them not having the latest phone must be a big problem. This made me think about whether any of the phone networks has ever considered the needs of older users. All of the advertising and marketing seems aimed at the young, and the design of the phones themselves does not seem very friendly towards older users. I certainly need reading glasses to work my phone. The buttons are extremely small, dreadfully fiddly to operate. I would be delighted if I could make it take longer to go onto the answering service, as unlike a teenager I do not clutch the phone close to me all day. By the time I find which pocket it is in today, the call has gone. There must be other things about mobile phones which would suit our age group, and certainly there are lots of things packaged within the latest phones which really are a waste for many of us.

While the phones and the networks are so clearly aiming at the young, the odd fact is that the great majority of us all have mobile phones now. They are not at all the preserve of youth, yet it would be hard to guess this from looking at publicity around them.

The way mobile usage is charged also seems oddly designed for the young – either it is Pay as You Go, which controls spending but is very irritating to have to keep topping up, or it is some regular volume of call time or text, which I never come remotely close to using up. I have to admit that I still have no idea how the deal to which I signed up, which was for £35 a month, somehow costs me £59 or so each month, but then I am still trying to grasp the principles behind my electricity bills, which seem somehow to involve the supplier holding large sums of my cash. It would be really nice if they just charged me for what I use each month, I could understand that.

So, what I would like would be a phone which allowed me to make and receive calls, texts, and emails, and to be charged for what I use. If they really insist, they can stick a camera into it as well, and maybe an alarm, but that just about does it for me. Although, with all this amazing technology, why not add some things which would be of value to our age group? A blood pressure monitor would be handy, maybe a breathalyser, and what about a Long Wave-only radio to listen to Test Match Special? Instead of SatNav, what about a device which locates your reading glasses? Or something really hi-tech, how about using Bluetooth to identify the phones of friends and relatives who are near you, so that when you meet them their name comes up in your phone – saves those embarrassing moments when you just can’t remember.

I think the Elderberry has potential. Send us your ideas and perhaps we can pester a manufacturer.

Equity Release

Many seniors in the UK are in the position of owning homes which have increased in value since purchase. They therefore can have considerable capital value in their home, but may be facing lower incomes in future due to retirement. The home can be used as a source of income, and for some people this can be a huge benefit – around £1.4 billion was raised this way during 2007.

Each person’s circumstances will differ, and before taking steps to release equity from a home it is vital to take good advice – the schemes are either expensive or impossible to put into reverse, and any action here will have an impact on money available to leave as an inheritance.

It also makes sense to consider alternatives before taking an equity release scheme. Selling the home and downsizing may be more sensible, especially if the house larger than needed now that children have left home – if they have! Keeping on a larger house will mean that all of the running costs will remain at the level of the larger home, and there could be considerable cost savings moving from an older, larger house to a smaller, perhaps more efficient new home. Purpose-built retirement flats and houses are now appearing in many excellent locations, and in later years these may be easier to live in and maintain than staying in the family home.

Nevertheless, many people will want to stay in their home, and still gain benefit from its increase in value. This is where equity release can help.

There are two broad types of equity release – either you retain full ownership of the property and take out a mortgage on it, or you sell part or all of the house but continue to live in it for the rest of your life, or until you choose to leave. They have different advantages and drawbacks, and really it is up to the individual to decide which is best for their circumstances. Mostly the qualifying age for these schemes is 55 or above, and in most cases the age of any partner will also be taken into account. In general, the younger you are, the less money you can expect to be offered.

With a Lifetime Mortgage, you retain full ownership of the property, and the mortgage provider gives you either a lump sum, or a monthly payment. Unlike a normal mortgage, you do not have any monthly payments to make to the mortgage provider. The amount owed to the mortgage provider will increase with time, as interest is charged on and added to the money you take out, so the longer you have the mortgage, the more it will cost – but on the other hand, if the property increases in value, then you have more money to pay back the mortgage at its end. It is generally possible to ensure that money is available for inheritance if you die while still owning the property.

If you do decide to move from the property before the end of the mortgage period, there may also be a penalty charge to add to the mortgage you owe.

Two important points: these mortgages are regulated by the Financial Services Authority, and you should be given a guarantee that there will be no risk of a Negative Equity situation – where the value of the mortgage could be more than the value of the property. This is really important for peace of mind.

The other main scheme is a Home Reversion plan. With this scheme, you actually sell part or all of your home to the finance company. You then do not own the whole property, but you are given a lease on it for the rest of your life, and you make no monthly payments. They provide you with a cash sum, and if you only sell them part of the property, there is still money to be passed on as inheritance.

Since you continue to live in the property after you have sold it, the company will not give you the full market value of the property, and generally the valuations for this kind of scheme are lower than for the Lifetime Mortgage. However, they will often pay out a higher total sum.

The consequences of a rise in property value is also different. With the Lifetime Mortgage, you benefit from the full rise in value, whereas with the Home Reversion you only benefit from the rise in the proportion of the property which you still own - so if you sold half of the property, you get half of any rise in value.

The Reversion schemes are nowadays far less popular than the Mortgage schemes, largely because of the issue of retaining ownership.

The Lifetime Mortgage also offers two options for taking the cash. The simple way is to take the full sum in one go, but it is also possible to opt for a Drawdown Lifetime Mortgage, which means that instead of taking the cash all at once, you can decide to take it progressively, as you find the need for it. The less you take, the less the interest will add up, and many people feel happier with this approach.

Whichever scheme interests you, do ensure that the company offering the scheme is affiliated to SHIP – Safe Home Income Plans. This gives guarantees of the security of the plans, and ensures vital aspects such as the No Negative Equity guarantee, particularly important when the market conditions may suggest that property values could drop, or not increase fast enough to make up for the interest added to your mortgage (this is compound interest, so it does grow quite a bit!).

It is also important to realise that these schemes may affect your ability to make some claims for benefits from the state.

We would also emphasise that these are schemes which are either expensive or impossible to put into reverse once they are taken out. This does mean that you need to do your homework thoroughly before signing anything, and the impact on inheritance means that you may well want to take the views of possible heirs to your estate into the process.

UK Businesses missing out on Senior Market

The senior discount specialist website, Oscaruk.co.uk, reveals that UK businesses are slow to benefit from the expanding senior market. Businesses in the USA, Canada, and Australia have recognised the buying power of seniors, and tailor offers to their specific needs. Seniors often have much more flexible timetables than younger people, so can be targeted with time-related offers by retailers, restaurants and entertainment, as well as the more usual holiday opportunities. Financially, they have a much lower need for borrowing, pay bills on time, and often have significant sums in savings. With incomes which are often fixed, they are more careful with spending, and are attracted to deals and special offers. Oscaruk.co.uk is aiming to carry 10,000 discounts on its site during the next few months, but contrasts this with the 140,000 on comparable sites in the USA.

Over 50s get poor deal in UK

Seniors in the UK have far fewer special offers than their equivalents in the US or Australia. The new website, oscar.co.uk has located around 4,000 discounts available to the over 50s in the UK, and is expecting to be able to expand up to around 10,000 discounts, while an equivalnet site in the USA lists 140,000 discounts. The pressures for deals in the USA, and a recognition of the spending power of the age group, means that discounts are offered on airlines, car rental, clothes shopping, supermarkets, and a whole range of product and retail areas which are not available on the UK. In Australia, individual states offer senior cards which provide a wide range of opportunities and discounts. Seniors traveling by rail in Canada get not merely a discount on their own travel, but a free ticket for a companion traveling with them. The UK has a long way to go to match the levels of recognition of the senior age group in these countries, and Oscar.co.uk is pushing for more businesses to take advantage of the opportunities which this age group offers for increased sales.

Cooperative Housing

One of the choices facing most people as they grow older is whether to stay in the home where they have spent the previous years, or whether to take the opportunity provided by family leaving home, and perhaps retirement, to change homes. One choice which has become popular in the UK is to move to another country, and we will look at that in a future article. Another option is to move from a house which was perhaps chosen in relation to family and work, and to choose a property more suited to living either singly or as a couple in later life.

Housing designed specifically for older people has begun to be an important part of the housing stock in the UK. We are seeing the development of houses and flats, often in city centres, which offer the opportunity to live in an environment which is different from traditional patterns.

There are really three different kinds of development, two of which are well established in the UK, but a third kind which has yet to emerge to the level we can see in other countries. The first is the sheltered type of development, in which the aim is to give a degree of independence to people who need some kind of care or who feel safer in a property where there is a form of help available, and the second is the flats and houses which are designed to be suitable for singles or couples without children, and with perhaps some shared facilities such as guest bedrooms. The first are generally rented properties, the second are more likely to be purchased.

However, in some countries we are seeing the development of a much more individual and enterprising movement, which offers an interesting alternative way of living. These developments are particularly strong in Holland, Sweden and Denmark, while in the UK we only see a small number of them, and so far it appears only developed for and by women.

These are cooperative communities of seniors, who come together as groups of friends or like-minded individuals, and who occupy properties or groups of properties together under some form of co-ownership. The method of organization differs, but in most cases the pattern which has been followed is to give each member of the community a privately owned part of the property, which is much like the second model of housing mentioned above, but to add on a communal aspect to this.

Usually this will mean that there will be a ‘common room’ in the property, which will work simply as a meeting place rather like the lounge of a hotel, and usually there is some form of communal meal once a week.

The real aim of these developments is to create an environment which allows groups of friends or like-minded individuals to enjoy a better social life than they might have living in their own properties spread out amongst the wider community. They are usually not people who have a specific need for care, or need a sheltered environment. Obviously these needs may develop with time, but being surrounded by a group of caring friends may delay the move to a sheltered environment.

The range of interest groups is extensive. While in the UK we have only found these cooperative schemes developed by groups of women, in those countries taking this route, the scope is much wider. There are groups which are simply friends, who have known each other for years and have decided to pool their resources and buy or develop a set of properties together. Some are single, some couples, and the ages are in some cases quite young – people in their 50s are frequently involved. These are clearly not ‘old folks’ homes’ but are places to enjoy a mix of private and communal living.

There are also groupings which are much more specific, and are based around either a style of life, a set of beliefs, or a set of interests. We have found groups with religious beliefs in common, sets of people who are all first generation immigrants into the country, vegetarians, groups centred around an interest in nature, music, and so on. Whether you actually want to share the rest of your life with a set of steam railway enthusiasts, left-handed bridge players, or Chihuahua breeders is obviously an important question, and losing interest in the topic could be a problem, but it does merit consideration.

The levels of shared or individual facilities vary between groups, but nearly all have a fairly high level of communal activity, with sharing of decisions on new members and other management issues. There need to be rules about what happens when a member leaves, as the valuation of property and passing it on through inheritance can be problematic if it is not thoroughly determined before the event. But all these things can be solved.

The real potential positive is that this kind of scheme could help avoid the loneliness which many people feel when they leave work and their family moves away. There is also research which shows that many older people are forced to leave their home and look for sheltered accommodation simply because they can no longer manage the trivial tasks of living alone – changing light bulbs or cutting the hedge. Sharing property allows these things to be done either by a more able neighbour, or by communally paying for outside help.

It does seem worth thinking about why these schemes have not taken off in the UK, and whether in fact they could offer a genuine opportunity for a better older life.