🔔 Will releasing equity now mean my children are left with next to nothing when I die?

Author: Anna Bowes
13th October 2018

I want to help my granddaughter buy her first home as I know she’s struggling to save on her own. Will releasing equity now mean my children are left with next to nothing when I die?


This is an increasingly common question, thanks to the long-term rise in UK house prices. Which has led to many First-Time Buyers (FTBs) struggling to save enough for a deposit, but also to save enough to negotiate repayments they can afford. The desire to help loved ones get a foothold in the property market has fuelled the rise of the 'Bank of Mum & Dad' or even Grandma & Grandad.

The latest research shows that the Bank of Mum & Dad will lend nearly £6bn pounds this year to get younger family members onto the property ladder. This means that just over a quarter of all FTB purchases will be supported by family¹. If you are a homeowner and are searching for a way to contribute to a deposit, then you could stand to benefit from releasing equity with a Lifetime Mortgage.

A Lifetime Mortgage is a specialist loan designed with over-55s in mind, allowing you to access some of your property wealth as tax-free cash. What’s more, there are no required payments and you retain 100% ownership of your home. The released funds could be used as an early inheritance, helping to top up a deposit, giving you the ability to make a significant difference. On top of this, you have the added benefit of being able to enjoy seeing your legacy having a positive impact, while retaining some control over how the money is spent.

Despite releasing equity fast becoming a mainstream option, with over £3bn pounds worth of equity released last year, some common misconceptions remain².

Unlike equity release plans of yesteryear, modern Lifetime Mortgages come with multiple customer safeguards.

All plans from Equity Release Council approved lenders feature the no-negative-equity guarantee as standard, ensuring that your loan, plus interest, can never exceed the value of your property. As a consequence, you can never pass on Lifetime Mortgage debt to your estate. In fact, if you’re concerned about leaving behind an inheritance for your heirs, then there are plans which allow you to ringfence a portion of your home’s value to be passed on to your beneficiaries as a guaranteed inheritance.

The main consideration when releasing equity is to consider your financial situation and how it may change in the future. This is because unlocking a portion of your home’s value may reduce the value of your estate in time and could affect your entitlement to means-tested state benefits. Fortunately, strong product diversity means that many plans come with features which can help mitigate these effects. An adviser can talk you through the best plans for your needs with a personalised illustration, giving you peace of mind and confidence in your decisions.

Whether you are looking to free up cash to contribute towards a deposit or you are researching how to gift an early inheritance, a Lifetime Mortgage could be a perfect solution. To find out how much tax-free equity you could release, why not use our free online calculator today?

Who are Responsible Equity Release?

Savings Champions have partnered with award-winning equity release specialists Responsible Equity Release. 

Responsible Equity Release have been providing the nation’s over-55 homeowners with quality later life financial solutions since 2010. 

Like us, they are passionate about what they do and combine modern financial solutions with good old-fashioned customer service.

Responsible Equity Release have a nationwide team of equity release experts on hand, ready to discuss your needs and wants for your financial future. 

All the providers they recommend are approved by the Equity Release Council, meaning that all customer-focused safeguards come as standard. 

Giving you the peace of mind to enjoy the comfortable retirement you deserve. With free, no obligation advice and personalised illustrations, they can help you find the Lifetime Mortgage that will match your later life ambitions. 

This expertise is vital as accessing some of the equity from your home with a Lifetime Mortgage may affect the value of your estate and your entitlement to means-tested state benefits. Plans are available that can help you to mitigate these impacts.

⇨ Find out how much cash you could release

Responsible Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is Authorised and Regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference 610205. Only if case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490.

¹ Source: Legal & General Bank of Mum & Dad Report 2018

² Source: Equity Release Council ‘Equity Release Council ‘Equity release records broken as unprecedented Q4 activity sees 2017 lending reach £3.06bn with annual growth at a 15-year high’ 23.01.18

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