Equity release is a type of lifetime mortgage that allows people over the age of 55 to release cash from their home “It’s not for everyone, but we gave it a lot of thought and it seemed to make sense,” says John Chalker, 80 🖋️ lizzyandersonuk
July 4, 2023 6:00 am
from his five-bedroom home. In 2019 he borrowed £400,000 through insurer Legal & General, which he split between the four children. If the loan is repaid after your death, this will reduce the amount that is passed on to dependants. But some people use the money from equity release to help their children financially during their lifetime – like John. Legal & General said almost a fifth of equity release customers this year have included gifting as a reason for taking out the loan.
Another reason why some people consider equity release is to potentially save on inheritance tax . This is only applicable to homeowners with estates worth more than £500,000 . “We treat all children the same. Anything we do for one we do for all four. I didn’t come from a wealthy family at all, but my parents believed in work ethic and savings and this was passed on to me. I’ve worked hard and been very lucky and I’m not going to complain about that,” says John.
“It is also important to ensure that you have enough savings for your own needs and emergencies before considering assisting your children with their mortgages,” she adds.
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