Retiree explains how she helped her children with house deposits
Make the most of your money by signing up to our newsletter for FREE now
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
On Legal and General’s Rewirement podcast, Shirley Ballas spoke to Sue about how she helped her children become independent before she retired. She said: “We helped the children before we retired, we did give them a deposit when they wanted to buy flats initially.
Giving gifts can help retirees see their loved ones enjoy their fortunes (Image: GETTY)
First time buyers generally need to try to save at least five percent of the cost of the home that they would like to buy for their deposit.
For example, if the home was £150,000, they would need to save at least £7,500 (five percent) for the deposit.
However, having access to more than five percent for the deposit may give people access to a wider range of cheaper mortgages available on the market and a lower interest rate.
Parents and Grandparents may decide to help their children with deposits so they may have a wider variety of house options and can choose something they love rather than the cheapest at the time.
Sue continued: “People can’t save it [a deposit].
“They [younger people] are now paying £200 a month less on the mortgage than they were renting.”
Buying a property now requires quite a bit of money up front so many grandparents, and parents may want to help with that cost.Not just for a deposit, but for all of the other costs involved.
This includes expenses for survey costs, solicitor or conveyancer fees, removal and moving in costs, initial furnishing and decorating costs, Stamp Duty etc.
Buying a property now requires money up front so grandparents may want to help with that (Image: GETTY)
With the average living age increasing, retirement is a 20–30-year event for some people.
This means that retiree’s do have a lot of time to watch their children, and grandchildren grow up, and enjoy their legacy.
With this in mind, many retirees may wish to give living inheritances to their loved ones so they can see them enjoy up front.
If retiree’s do wish to help their loved ones, CEO of the podcast Sara McLeish gave this advice:
“Helping children and grandchildren is a very big decision.
“it should be approached as just that.
“There are so many factors to take into consideration, not least whether you’ve got enough money to last you for all those 20-30 years of retirement, and that you can gift that money without leaving yourself short.
“I would always recommend speaking to a financial advisor to get some really expert advice on what the implications will be for you and the best course of action for your particular circumstances.”