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.
Standard Life Assurance Limited is owned by the Phoenix Group and uses the Standard Life brand under licence from the Standard Life Aberdeen Group. You can find more information about Standard Life Aberdeen plc’s strategic partnership with Phoenix at www.standardlife.com/partnership
Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.
Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
www.standardlife.co.uk
© 2018 Standard Life Aberdeen, reproduced under licence. All rights reserved.