Getting on the property ladder with help from bank of gran and grandad

by Standard Life | Sep 10, 2018
Rising property prices and the increasing cost of further education mean that today's young adults face a much greater financial hill to climb than previous generations. And increasingly, it's grandparents who are coming to the rescue.

Rising property prices and the increasing cost of further education mean that today’s young adults face a much greater financial hill to climb than previous generations. And increasingly it's grandparents who are coming to the rescue.

The Council of Mortgage Lenders* suggest that the proportion of first time buyers getting help from parents or grandparents has risen from around 30% in 2005 to more than 50% in 2011.

Sharing wealth between generations not only helps grandchildren pay off student debt or get a foothold on the property ladder, it can also help to reduce the grandparents’ IHT liability.

But thought needs to be given on the best way to pass on wealth and how to hold and invest it until it's needed.

The satisfaction of giving

Many grandparents often leave money in their wills for their grandchildren. But by making that gift during their lifetime, they get to see the benefit it has on their family on many different levels:

  • They will have played their part in their grandchildren’s futures;
  • A financial burden on their own children will have been lifted; and
  • At a personal level, they may have made IHT savings. 

Grandparents may insist on an element of control over who benefits from their gift and when. They may also want a say in where it's invested. 

 

Read our insight to discover:

  • The benefits of lifetime gifting;
  • How trusts can help alleviate concerns of giving grandkids too much too soon; and
  • Why allowing the grandparents to have control doesn't have to come at a price.
Read the full article


* https://www.cml.org.uk/news/news-and-views/390/

The views expressed in this article should not be regarded as financial advice.

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