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Cheap mortgage offers early nest-egg

Date: Mon, 27 Feb 2006

Cheap mortgage deals are increasingly helping to provide an early inheritance for relatives.

Research from Scottish Widows estimated that 1.9 million families could benefit from an early inheritance funded via equity releases.

One in five people claim that they are planning to release equity from their houses before they die in order to help their children step on the property ladder or rearrange their financial commitments.

Passing on gifts before death means that subsequent inheritance tax could be reduced and four in ten pensioners currently estimate that their estate will be subject to such tax – especially as the housing market continues to prosper. However, being able to release equity will lesson this final amount – as longer as the donor lives for seven years after the donation.

Murdo McHardy, head of product development and marketing at Scottish Widows Bank said: "It is understandable that retirees may want to see their children and grandchildren benefit from the money that would otherwise be put aside for their inheritance.

"Equity release products are a way for some retirees to be able to help their children, provided that it suits their individual circumstances."


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