Inheritance update as Britons set to change plans for children in cost of living | Personal Finance | Finance
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New research has shown larger numbers of over 50s are now expecting to support their adult children financially. As a result of financial challenges facing families, over 50s are reevaluating inheritance plans.
Some 15 percent of those asked said they would give away money as a result of the crisis, according to Saga Equity Release.
This is the case for Barrie Smith, a 67-year-old man from Pembrokeshire, who explained how he has “fast forwarded” his children’s inheritance.
His primary motivation for doing so was to help them to get on the property ladder.
Mr Smith said: “I’ve got two children and three grandchildren. My wife and I have helped both out recently with money towards a housing deposit and refurbishment.
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However, with this becoming more of a challenge, older people are now considering differing approaches to inheritance.
Saga has highlighted equity release, which allows Britons to unlock equity in their home in the form of a tax-free lump sum payment or payments.
Alex Edmans, Head of Retirement at Saga Personal Finance, said: “The Bank of Mum and Dad was a critical lifeline for many people during the COVID-19 pandemic.
“More parents are now considering different approaches to inheritance – be that fast-forwarding plans, gifting sums of money or releasing equity from their homes. We could see permanent changes to attitudes towards inheritance as a result.”
Economic uncertainty appears to have triggered changing views on inheritance, with 12 percent of over 50s asked having gifted away money during the pandemic.
Now, over a third of those asked said they are also more open to different types of inheritance, with the same proportion wanting to see their children benefit from their gift before they die.
Equity release is a decision many people will need to take advice on, as it might not be suitable for everyone, with Carolyn Matravers, Chartered Financial Planner at Old Mill, telling Express.co.uk: “There are lots of pensioners and people approaching retirement who are property rich and cash poor due to a healthy increase in the value of their homes, rising inflation eating away at their savings and a huge increase in the cost of living.
“For homeowners whose other sources of income will not be enough to meet their needs in retirement, who don’t want to – or can’t – downsize to a smaller property and don’t mind reducing their family’s inheritance or have no beneficiaries, equity release is an option.
“But assessing someone’s position and identifying whether they are receiving all the benefits to which they are entitled is an essential first step and can really make a difference to their finances.
“The advertisements make Equity Release sound so appealing and when cash is low people feel it is the only option. For some that is the case, but for many it is often a case of taking a step back and re-visiting all the options before going down this route.
“Another solution could be found, such as renting a room out, that would ease the financial strain. Anyone thinking about equity release should speak to an independent financial adviser for help and advice on the best options for their own circumstances.”
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