The over 55s are wealthier than ever. Thanks to careful investment and decades of rising property prices, they hold the majority of property wealth in the UK; £3.1 trillion and rising. If you are part of this generation, discover how your property could hold the key to creating a family legacy that you can realise today.
September heralds the start of another academic year, a month fizzing with purposeful post-holiday energy. It’s time to set new plans and fresh priorities and where better to start than with the family finances.
Our financial priorities change over time. Once we’ve achieved our own milestones, thoughts often turn to the next generation. You may want to support your children to set up a business, step onto the property ladder or renovate their own forever home. Or perhaps funding your grandchildren’s education is the priority: fees at independent schools rose at an inflationbusting annual rate of around 4% between 2000 to 2020 to an average of over £15,000 for day pupils and £36,000 for boarding students, making timely planning essential.
Whatever your plans, your property could play a key role in your family’s future. With sensible planning and a keen awareness of tax implications, not only can you support those closest to you, but you can also make prudent financial choices. Recently released official figures show that the number of families in the UK facing Inheritance Tax in 2020-21 rose by a third, with the number expected to increase still further over the coming year. No wonder some 52% of high-net-worth individuals in the UK view tax planning as central to their wealth management strategy.
If you are over the age of 55, now could be the right time to explore the potential in your property. Let Knight Frank Finance show you how.
Your Trusted Property Adviser
You’ll know Knight Frank as one of the world’s leading property firms who, for 125 years, has provided clients with personalised property advice. The team at Knight Frank Finance offer the same outstanding expertise across every aspect of property finance. We provide trusted advice to a wide range of clients, from those with lending requirements for complex property portfolios to first-time buyers seeking their first mortgage.
For 125 years we have helped our clients make the right decisions at every stage of life. That’s why establishing our Later Life Finance service in the UK, exclusively for those over 55, was a natural extension to our role as your lifelong partners in property.
A Mature Market
Later Life Finance options include retirement mortgages and equity release, terms you may have heard before. Put aside any preconceptions though, because today this is a rapidly maturing market that has become an essential component of financial planning.
“Later Life Finance is quite simply a market transformed,” explains David Forsdyke, head of the service at Knight Frank Finance. “The market has evolved into one dramatically more flexible than we’ve seen before, with nearly 700 products available. For clients that means significantly better choices.”
“Many of my clients are choosing to release equity from their property to provide a living inheritance for their children. By taking a holistic approach and considering all the financial assets at our clients’ disposal, we can often demonstrate how they can create new wealth and opportunities for younger generations by borrowing against their property. For example, one asset-rich couple chose to raise what’s known as a lifetime mortgage against their main residence to provide funds for their son’s next property purchase. By making a significant financial gift now, my clients not only facilitated an immediate major step up the property ladder for their son, but also reduced the Inheritance Tax bill he might face in the future.”
Using your property wealth wisely gives you the most important prize of all: choice. Whatever you hope to achieve, we can help you find a way.
How Later Life Finance Gives You Choices
David explains some of the details: “Modern Later Life Finance products allow you to take a lump sum, a fixed amount each month, or enjoy the flexibility of having access to funds when needed. And while flexibility has increased, the cost of borrowing has dropped dramatically in recent years, making it more attractive than ever. This can really open up new opportunities.”
At this time of year, you may be thinking about school or university fees for your children or grandchildren. Consider a lifetime mortgage, which gives you the flexibility to choose how you access your equity. You could release funds on a gradual basis to support their education over the long-term without needing to repay the loan every month. Or you may prefer to take out a one-off amount, as some schools offer a discount for fees paid as a lump sum. It’s your choice.
These are just a few examples. Making use of your property wealth in these ways requires careful consideration and bespoke advice, available for you with Knight Frank Finance.
As we celebrate our milestone 125th anniversary this year, let us help you make the most of your next milestone, whatever that might be.
If you would like to know more about how a Lifetime Mortgage could help you finance school fees or leave a living inheritance for your children, talk to David or a member of his team by emailing later.life@knightfrankfinance.com or by calling 01483 947764. David runs the Later Life Finance team at Knight Frank Finance and is a recognised expert in this field.
This article first appeared in Country Life magazine, a publication which comments in depth on a wide variety of subjects, such as architecture, property, the arts, gardens and gardening, the countryside, schools and wildlife.