CASE STUDY: MR AND MRS WILSON, THEIR DAUGHTER, GRANDSON AND GREAT GRANDCHILDREN
Mr & Mrs Wilson
• Late 70s
• Property worth: £400,000
• Grandson who is expecting his second child
They have their only daughter Rebecca who has a son of her own called Michael. Michael is Mr and Mrs Wilson's grandson.
Michael has recently finished re-training and started full time employment as an accountant. His girlfriend has recently fallen pregnant with their second child, so Michael is desperate to move out of their flat and buy a house. Michael has next to no savings as he needed them to help him through his time retraining. He wants to stay in the same area as his mum and his grandparents but due to costs of houses in the area, he and his girlfriend are unable to save enough for a deposit.
THE SOLUTION? EARLY INHERITANCE
Mr and Mrs Wilson contacted their financial adviser to see if they would be able to help Michael and his girlfriend. However, in conversation, their financial adviser let them know that Mrs & Mr Wilson were able to gift Michael his inheritance early. As Mr and Mrs Wilson own their house outright, they were able to use equity release to take out £50,000 of tax-free cash from their property and gift it in its entirety to Michael – giving him a great head start to be able to get on the property ladder. In fact, he was able to get a property right in the village with his mum and grandparents.
7 YEARS LATER.....
After a few years in retirement with their state pensions and a bit of a private pension, Mr and Mrs Wilson wanted to seek advice again from their financial adviser about the prospect of using equity release to enable them to enjoy their retirement a bit more comfortably. Their financial adviser has now been able to re-mortgage their equity release and get a better interest rate. As the property has already gone up in value, they are able to receive another £30,000. Mr and Mrs Wilson can take out further money by using drawdown as and when they want to spend it and they will only be accumulating interest on the amount they spend. Rebecca is more than happy for her parents to use their tied-up equity as funding, so she can see them live the rest of their lives as best they can