Lightening the load

John and Sarah Watson are a married couple in their late 60s and have both recently retired. They live in their former council house, which they bought jointly in 1982 under the right to buy scheme. It is now worth £450,000. They have a son and daughter, both of whom are married, financially independent and with children of their own. John and Sarah are very grateful for the fact that they have been able to retire on final salary based pensions from their former employers. These give John an annual income of £12,000 while Sarah has £10,750. They are particularly pleased that the tax-free ...