Retirement Money News

It has become common for aspiring homeowners to turn to the bank of mum and dad to realise their dream of owning their first home, but for some, grandparents can also have the assets to help them get onto the property ladder.

In fact, grandparents may have more resources at their disposal than parents that can be used to help the younger generation to buy their first home. Here we’ve looked at some of the most common options available to grandparents wanting to help their grandchildren onto the property ladder.

Over the last five years equity release rates have consistently fallen and last month borrowers with a minimum 30% loan-to-value (LTV) could get rates from as low as 3.03%. As rates are so low at the moment, it makes it a tempting time for homeowners looking to unlock some money built up within their homes through equity release. Homeowners considering this, however, should carefully consider all their options before taking equity release and speak to an independent financial adviser before making a decision.

Comparing some of the most competitive lifetime mortgage rates month-on-month reveals that a number of rates have fallen during June. This, combined with rising house prices, makes equity release highly attractive to homeowners aged over the age of 55 looking to release equity from their home. Saying this, equity release still has a long-term impact on finances, especially on the inheritance the borrower leaves to loved ones, and as a result those considering equity release should speak to an independent financial advisor first to make sure it is the right decision for their personal circumstances.

The plans highlighted below are not endorsed by Moneyfacts.co.uk but have been chosen as they offer competitive rates for the scenario that we have selected. It should be noted that other plans are available that offer similar competitive rates but may offer incentives, such as cashback, that suit the borrower’s needs better – as such borrowers should speak to an equity release broker who will be able to select the best plans for individual requirements.

Whether it is getting a pay rise or paying off ,a long-term debt, getting a little bit extra each month can be a great boost to personal finances. Although it can be tempting to spend the extra money, homeowners who already have an emergency fund saved may want to think about the long-term and consider putting the extra money towards securing their future instead.

For homeowners thinking ahead, often the choice is between using the extra money to pay off their mortgage early or boosting their pension contributions. Although choosing which is the best option, Kellands, an independent financial adviser company, said: “A starting point, is to align your mortgage term to your preferred retirement date, ensuring you do not carry debt on your main residence into retirement. Beyond this, allocating further income or savings to tax-efficient investment can make sense. The consideration is to balance a known interest cost of a mortgage, against the unknown and variable, but potentially higher return available from investing. Valuable tax allowances, particularly those offered through pensions and ISAs can help sway the argument. The consideration tends to be a personal one, factoring your wider financial position, and views on risk and towards debt in general.”