Finance Choices
Property to provide early inheritance
Millions of parents are planning to use some of the value of their property to give their children part of their inheritance early.
Research from Scottish Widows Bank finds that one older homeowner in five is planning to release equity from their property to give their children some financial aid.
"It is understandable that retirees may want to see their children and grandchildren benefit from the money that would otherwise be put aside for their inheritance," said Murdo McHardy, of Scottish Widows Bank.
"Receiving these gifts can help offspring to financially prepare for their future, for example by providing a deposit on a first home."
This new research runs against the increasing trend for older Britons to go "skiing" - or "spend the kids' inheritance" (full story).
Scottish Widows Bank calculates that 1.9 million families might benefit from an early inheritance from older relatives.
These findings were revealed after Scottish Widows Bank commissioned research into what older homeowners would do with money that was released from their homes with some form of equity release product.
Equity release allows older homeowners to either sell a proportion of their home, or borrow against its value - but not have to make any payments against this money until they die or move into permanent care and their home is sold.
Scottish Widows Bank finds that passing on money to their families is the top option for what to do with any money released.
After helping out their families, home improvements are the next most common destination for funds.
However, the UK's older residents are not entirely altruistic - with 1.4 million retirees saying they would use money released by a lifetime mortgage or similar product to go on holiday.
"As the make-up of the population changes to include more pensioners, we will see more people using equity release products," Mr McHardy noted.
"It is important that consumers fully understand the risks involved with these products, and that this is the right option for them to take. Our research shows that retirees are planning to use their money sensibly in order to help their offspring with their financial situations or to help them prepare their own finances."
Research from Scottish Widows Bank finds that one older homeowner in five is planning to release equity from their property to give their children some financial aid.
"It is understandable that retirees may want to see their children and grandchildren benefit from the money that would otherwise be put aside for their inheritance," said Murdo McHardy, of Scottish Widows Bank.
"Receiving these gifts can help offspring to financially prepare for their future, for example by providing a deposit on a first home."
This new research runs against the increasing trend for older Britons to go "skiing" - or "spend the kids' inheritance" (full story).
Scottish Widows Bank calculates that 1.9 million families might benefit from an early inheritance from older relatives.
These findings were revealed after Scottish Widows Bank commissioned research into what older homeowners would do with money that was released from their homes with some form of equity release product.
Equity release allows older homeowners to either sell a proportion of their home, or borrow against its value - but not have to make any payments against this money until they die or move into permanent care and their home is sold.
Scottish Widows Bank finds that passing on money to their families is the top option for what to do with any money released.
After helping out their families, home improvements are the next most common destination for funds.
However, the UK's older residents are not entirely altruistic - with 1.4 million retirees saying they would use money released by a lifetime mortgage or similar product to go on holiday.
"As the make-up of the population changes to include more pensioners, we will see more people using equity release products," Mr McHardy noted.
"It is important that consumers fully understand the risks involved with these products, and that this is the right option for them to take. Our research shows that retirees are planning to use their money sensibly in order to help their offspring with their financial situations or to help them prepare their own finances."
posted by Bruce Wayne at 8:48 AM
Property to provide early inheritance
4 Comments:
£400 per person per year, big deal!
But to whom are they going to sell it to exactly, notional gains have to be cashed out... and if the generation leaving the assets cannot reafford their own homes and the next generation is priced out, where does the liquidity come from? The demographics point to far more boomers than those in the 20-30's range, hence the governments intention of importing as many 20 year olds as possible to soak up the surplus? The problem is that they wont stick around for long if they can't afford a decent place to stay, or have to work like a dog.
Wait until the children find out their dear old parents took equity withdrawl. lol
QUOTE:aj
Wait until the children find out their dear old parents took equity withdrawl.
ENDQUOTE
How else would the debt mountain have been formed? Most "boomers" are up to their eyes in debt and can't even retire let alone leave a huge sum to Generation X. All that wealth is owed to the VIs! This "news" is another propaganda blurb coming from Gordon in his run up to moving into No. 10.
HPI is not a replacement for production. The UK cannot continue to enjoy wealth without a means of production apart from the widespread opinion that houses are "worth" more here than anywhere else in the world. It is just not real and as Warren Buffett would say--just because people are paying outrageous prices for something does not necessarily reflect its value. House prices are a matter of opinion whereas debt is real (Merv King, BoE).
Post a Comment
<< Home