Jeff Hemmings - 27 July 2022
ARCHIVED - Family fortunes: Financial help between the generations
There are different ways that families can help each other financially, as Jeff and his wife Fleur found out when they struggled to buy in the competitive Brighton property market.
Increasingly, intergenerational financial help is not simply about the Bank of Mum and Dad giving their cash-strapped 20-something offspring a leg-up on the property ladder. My wife and I are on the grown-up side of 50 and not so long ago, we were able to benefit from family assistance when we were trying to buy a house in Brighton to accommodate our growing family.
Fleur and I have always believed that the point of family is to love and support one another. This, for us, included financial help when we were starting to wonder if we would ever be homeowners in our late 40s.
Money is a touchy subject
There is significant trepidation out there about playing the generation game with financial assistance. For many people, talking about money, let alone asking for it, is a source of deep discomfort. But I feel our generation has helped to challenge a cultural change away from those attitudes. Apart from anything else, it’s been driven by necessity.
For us, it was a case of my in-laws to the rescue. Fleur’s parents had already decided to help their three daughters when they wanted to buy property. And within just a year into our relationship, and with a baby on the way, they were good on their word. We were given £30,000, just as they did with their other two daughters over the years.
They did this by releasing equity from their own property, a process they found easy and hassle-free.
"As long as we're not leaving anyone with any liabilities, it feels like the right thing to do," says Fleur's father, Clive. "As an exercise to help your children, I think it's a sensible and positive thing to do, rather than taking it to the grave with you.
“I think it's been a help to our children, giving them a good start. I can relate it to my time in Southampton when we didn't have any money at all,” Clive recalls. “In 1966, I was the beneficiary of a scheme where I could get a 100% mortgage though, and property prices were very low compared to now. Our mortgage was £4,225 if memory serves me correctly."
It had an enormous impact on our lives
That £30,000 made the difference between owning our own home and the vulnerability of renting. With a family, the last thing we wanted was to be insecure. And we have remained in the same property to this day, happy to live and work in Brighton.
It seems that helping each other out is the name of the game now. My mother, who is in her mid-70s but remains in good health, is in the process of releasing equity from her property to help me and my sister pay off our mortgages.
Mum has decided that rather than wait until she dies, it is better to do this now, so we can whittle down our mortgages. My sister and I are now in our 50s, so who knows how long we'll be fit and healthy enough to carry on working? This financial help has taken a huge weight off our minds and our mortgages are now considerably more manageable.
"I am able to do this easily. It feels like the right thing to do," says Mum.
And we will carry this forward
Fleur and I have two sons – we know things might be tough for them in an uncertain world – so we intend to do the same thing for them. Whether we release some equity when the time is right or give them a handy lump sum, they will have the same sort of helping hand that we enjoyed.
When our parents gave me and Fleur financial assistance, it kept their parental worries at bay. And when we help our sons, we too will be able to rest easy knowing we have given them security and protection for the future.
Inter-generational financial help, such as equity release, is a viable solution for many families. If you are still feeling nervous about what it entails, whether you’re eligible, and what processes are involved, seek out professional advice.