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Keeping wealth within the family

By Mark Gregory on the 21st August 2017

Late middle age may have its drawbacks, but for many people, it brings multiple benefits. With the mortgage often paid off, and hopefully years of fruitful retirement beckoning, many people’s thoughts turn to how best to use the wealth they have accrued over their working years.

For the majority of people approaching retirement, the concern uppermost in their minds is passing those benefits on to their family, without the threat of Inheritance Tax looming.

Whether that’s helping your children pay off their debts or giving your grandchildren some money to see them through university, providing financial aid to loved ones is something many older people decide to do.

You may well be lucky enough to have amassed large savings during your time in work, but many people only have a small amount of savings when they come to retire, which they want to keep ‘for a rainy day.’

If this is the case, you may be thinking you will not be able to pass on your assets to your children or grandchildren before you die - but if you have your own house, you’d be wrong.

One increasingly popular way of doing just that is through an equity release scheme. According to the latest figures, around a quarter of people who sign up to equity release schemes use the funds to pass on some of their wealth to their family.

People like to see the good their money can bring, and have more control over how it’s used. For instance, if you use equity release to give your grandchildren money to pay for university, hopefully you will be able to witness them graduate.

Equity release allows you to free up some of the cash tied into your home, while still living there. The amount you borrow is only usually paid back when you die, or when you go into care. So it can be the ideal way to pass on your wealth to your family often referred to as intergenerational gifting.

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