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One of the questions I hear most often from clients is, ‘What’s the point of leaving our children an inheritance if they need help now?’
It’s a fair question. Many parents and grandparents watch their adult children struggle to save house deposits, manage education costs, or deal with financial emergencies. Meanwhile, they’re sitting on substantial property wealth that won’t benefit anyone until after they’re gone.
This is where a Lifetime Mortgage helps parents and grandparents make a meaningful difference while they’re alive, so they can enjoy seeing the impact. Let me share how this works, what you need to consider, and some example situations.
Why Give Now Rather Than Later?
The traditional approach to inheritance is straightforward: you pass away, your estate is settled, and your children inherit. But life doesn’t always wait for the right time.
The Housing Crisis Reality
Your children are likely to face a very different property market than you did. Average house prices have risen dramatically, while wages haven’t kept pace. Plus, saving a deposit while paying rent is incredibly difficult.
As an example, a couple who bought their first house in 1982 for £28,000 might see their son looking at flats costing £250,000 today. After eight years of saving, he might still be £15,000 short of a deposit. Rather than waiting another decade or inheriting money in his 60s when he may not need it as urgently, parents in this situation could use a Lifetime Mortgage to help him now.
Education and Opportunity
Some families use a Lifetime Mortgage to fund grandchildren’s university fees, private school costs, or specialist tutoring. Others help with starting businesses or career development.
Consider a family where a granddaughter has dyslexia and needs specialist tutoring costing £80 per week. Grandparents might release £25,000, recognising that this support during her formative years could positively affect her whole life and be potentially more valuable than leaving a larger inheritance later.
Life Events and Emergencies
Sometimes adult children face unexpected challenges, such as redundancy, divorce, health problems, or business difficulties. Having parents who can help in these moments can be life-changing, at that time and for many more years to come.
How A Lifetime Mortgage Helps Parents Support Their Families
A Lifetime Mortgage is a form of equity release that allows you to borrow money secured against your home without making monthly repayments. The loan is repaid when you pass away or move into care, typically from the sale of your property, with a reasonably straightforward process.
- You decide how much you want to release (based on your age and property value)
- The money is paid to you as a lump sum or through a drawdown facility
- You gift the money to your family members
- You continue living in your home with no monthly repayments
- The loan (plus interest) is repaid from your estate eventually
A key advantage is that you can help your family when they need it most, while still living in your home and maintaining your independence.
Real Ways A Lifetime Mortgage Helps Parents and Grandparents
There are many examples of how my clients have used a Lifetime Mortgage to support their families.
House Deposit Help
This is by far the most common reason a Lifetime Mortgage helps parents assist their children.
In one scenario, parents in their late 60s with two daughters struggling to save deposits while renting might release £80,000, giving each daughter £40,000. This could enable both to become homeowners, allowing the parents to visit them in their own homes, help with decorating, and see grandchildren growing up in stable, secure environments.
The emotional benefit is significant. Parents tell me how proud they are to see their children in their own homes, and children express immense gratitude for the help that changed their lives.
Clearing Adult Children’s Debts
Sometimes, a Lifetime Mortgage helps parents rescue adult children from difficult financial situations.
Imagine a situation in which an adult child’s failed business leaves them overwhelmed by debt, affecting their health and marriage. Parents might release £45,000 to clear everything, allowing their child to find stable employment and rebuild their life. The parents could view this as a far better use of their property wealth than leaving it untouched.
Education and Training
Grandparents particularly often use a Lifetime Mortgage to fund grandchildren’s education.
In another example, a grandson wanting to train as a commercial pilot faces course costs of £120,000. If his parents can’t afford this, his grandparents might release £60,000 as a contribution toward his training, enabling him to pursue a successful aviation career they could witness and celebrate.
Wedding Contributions
Some families use a Lifetime Mortgage to fund meaningful weddings that create lasting memories.
Consider a daughter whose partner is from Australia, wanting to marry in the UK so both families can attend. If the costs feel daunting, parents might release £25,000 to help create a meaningful wedding that brings both families together and view the memories and photos as priceless investments in family connection.
Starting Businesses
Entrepreneurial families sometimes use a Lifetime Mortgage to fund the next generation’s business ventures.
In a business scenario, an adult child might have a promising business idea but struggle to secure bank funding. Parents could release £50,000 to help launch the venture. Suppose the business subsequently grows to employ several people and becomes successful. In that case, the parents can witness their support creating not just their child’s livelihood but also jobs for others in the community.
Important Considerations Before Giving
While a Lifetime Mortgage helps parents support families in wonderful ways, there are several financial implications to be aware of if it is being used as part of tax plan. In this instance, please seek the advice of a qualified Independent Financial Advisor.
Inheritance Trade-off
Any money you give now reduces what you’ll leave in your will. A Lifetime Mortgage loan grows over time because interest compounds, so make sure everyone understands this trade-off. However, many families feel the benefit of helping now outweighs leaving a larger inheritance later.
Family Dynamics
If you have multiple children, transparency is crucial. Some clients give equally to all children. Others provide different amounts based on need. Either approach can work, but secrecy often causes family rifts.
Think carefully about the emotional implications of giving while alive:
- Could it create dependency or entitlement issues?
- Will adult children appreciate the help or take it for granted?
- Are you giving freely, or feeling pressured?
- How will you feel if the money isn’t used as you hoped?
Most families navigate this beautifully, but honest reflection beforehand prevents misunderstandings later.
Alternatives to A Lifetime Mortgage for Helping Family
Before deciding to move forward with a Lifetime Mortgage, there are alternative ways for parents to support their families.
- Downsizing
Moving to a smaller property might release equity without borrowing. You’d have no debt and could gift money outright. - Savings and Investments
Could you use existing savings or investments instead? This avoids interest charges on borrowed money. - Loans to Family
Some families prefer formal loan agreements with repayment terms, keeping the money in the family rather than paying interest to a lender. - Gradual Gifts
A gradual gift is a way to give your family a specific amount of money each year that is tax-free. Over time, this can provide meaningful support without extensive borrowing. It is worth speaking to an Independent Financial Advisor to confirm the amount and any further considerations. - A Lifetime Mortgage with Inheritance Protection
Some Lifetime Mortgage products include inheritance protection, guaranteeing a percentage of your property value will be protected for beneficiaries. This costs more (a lower amount borrowed or a higher interest rate) but ensures something definite is left behind.
Practical Steps to Making It Work
If you decide that a Lifetime Mortgage will help you as parents or grandparents to support your family effectively, here’s how to approach it:
- Have Open Conversations
Sit down with all family members who’ll be affected. Explain your thinking, your plans, and the financial implications. Transparency prevents resentment.
- Get Professional Advice
Work with a qualified Lifetime Mortgage advisor who’s a member of the Equity Release Council. We’ll ensure you understand costs, interest, and alternatives.
- Consider Timing
Think about when gifts will be most beneficial. Immediate house deposit help? Gradual university fee support? Structured business investment?
- Document Everything
Keep clear records of gifts given and amounts. This helps with estate planning and prevents family disputes later.
- Review Regularly
Life changes. Stay in touch with your advisor to ensure your Lifetime Mortgage plan continues to suit your circumstances.
The Emotional Rewards
Beyond the practical financial help, there’s something very rewarding about seeing your support make a difference while you’re alive. Knowing that you’ve helped make something possible is priceless when you think about it happening after you’ve passed.
That sentiment appears repeatedly in conversations with clients. The ability to witness your help improve lives, solve problems, and create opportunities brings satisfaction that an inheritance simply cannot.
Is A Lifetime Mortgage Right for You?
A Lifetime Mortgage helps parents and grandparents support families in countless ways, but it’s not suitable for everyone.
- Does your family genuinely need help now, or could they manage without it?
- Are you financially secure enough to reduce your own inheritance?
- Have you discussed this openly with everyone affected?
- Do you understand the long-term cost of compound interest?
- Have you explored all alternatives first?
If you’re considering using a Lifetime Mortgage to help your family, I’d be happy to discuss your situation in a free, no-obligation consultation. We’ll explore how much you could release, what it would cost in the long term, and whether it’s the right approach for your circumstances.
Helping family is one of the most rewarding uses of a Lifetime Mortgage I see in my work. When it’s done thoughtfully, with open communication and proper planning, it creates positive ripples across generations.
Whatever you decide, make sure it feels right for you – because your wellbeing and security matter just as much as supporting those you love.
Frequently Asked Questions
Ready to Explore Your Options?
If you’d like to discuss your options in a friendly, no-obligation consultation, I’d be happy to help. I can visit you at home in Staffordshire, the surrounding counties, or arrange a video call if you’re further afield.
Call me on 07990 836455 or get in touch here to book your free consultation.
Important Information
A Lifetime Mortgage is not suitable for everyone, and it is important to seek financial advice before taking any action. All other options available should be explored before choosing a Lifetime Mortgage.
Interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home potentially to nothing. Please discuss with your family and beneficiaries.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Jane Jackson Financial Solutions is a trading name of Just Mortgages Direct Limited, an appointed representative of The Openwork Partnership – one of the UK’s largest Financial Advice networks with over 4,500 advisers nationwide.
