Helping kids on property ladder

[Lm1981]

All signs are that house prices go up over the long term. As mortgage/rent make up a huge portion of wage are you planning any help for kids? Even if kids are still very young does it cross your mind of something to start now?

My child got 7k (Gov CTF sticks and shares) when he turned 18. He put this in a high interest account and is enjoying the interest being added over £100 interest since end of August when he turned 18.

He is at Uni now for 5 years we are paying his accommodation about 8k a year and he is living on the minimal loan of 4.5k a year.

We have decided to match anything he has left over at the end of this term if he pays it into his savings account.

He passed his driving test at 17 but he decided he didn’t want a car because it was a waste of money as he was going to Uni. We will gift him one of our cars which we’ve had from new when we upgrade in a few years both under 40k mileage and been serviced regularly. Nothing flashy just practical.

We will downsize in a few years and hope to gift him 50k deposit however, once he graduates the first 8 to 10 years of his career he maybe placed anywhere so not sure he will buy a house til he’s 30.

My husband and I had zero help from our parents financially.

Neither of us are big earners we are just trying to give our son a financial springboard so he can feel like he has control over his financial future because when my husband and I were students we felt hopeless at times like we could never get ahead and this led to a bad relationship with money.

There is also the issue of ‘deprivation of assets’ as local councils are having their budgets drastically cut by central government.

Councils are really having to dig into peoples’ financial history at the point of anyone needing care. If they can prove you have given money away, they can decide not to finance care and charge family members who have benefited from your assets.

Not very tax efficient though at 25% CGT

This is not how it works unless you have a reasonable expectation of needing care i.e you are already unhealthy/struggling/need support.

It is becoming much tighter in councils checking back….for the reasons above.

It is a really complicated situation. Give away your assets too early and you may become beholden to your children or other relatives, wait longer and it is too late as the council are, quite rightly making all the savings they can.

A £4,500 per month care bill is focussing my mind….

We have just given one DC a large lump sum towards mortgage and will be doing the same for the other. We can afford it and go by the motto of better for them to have it now while they need it. Any moneys will be theirs one day anyway.

It is becoming tighter, but 7 years is good enough for IHT and it is also more than the limit for councils to reach back.

We had both DC live at home rent free after uni. Then 4 years ago gave them lump sums of around £60k. This was a no strings gift they were 21 and 23.
They took student loans because we couldn't realistically pay for uni plus a deposit.
This is more than enough for a deposit where we are.
DC1 bought in 2020 but DC 2 has his invested.
We also give them money each month.
We aim to give another lump sum in the next year or two.

We will start saving 3 k a year for him in a Lisa once he has finished his first year of Uni and passes 🤞We also wanted to wait and see how he handled the 7k he got when he turned 18 as we had no control over what he did with it. So far he’s being sensible with it. I think he likes the feeling of having an emergency fund and he’s happy the interest will pay for his £400.00 gym membership next year too. This is the ultimate goal for us and I believe giving teenagers some savings to manage will help them develop good habits my husband and I never got that chance.

Also, I’m hoping Euthanasia is legalised as an ex HCW I would hate to end up in a care home.

Got enough information for your article yet?

IHT yes, council are backtracking more than 7 years. Sign of the ‘Tory’ times with near bankrupt councils.

No way can councils afford the care needs of adults who have given money away.

Really tricky isn't it as it also demands a lot of trust within a family. I could give a lump sum or my house to my DC’s, they could divorce and neither of us would be left with very much.

Proof? Or is this something you’ve been ‘told’. There has to be a legal basis. Perhaps you can point me to the relevant legislation.

Can I ask - those of you gifting large sums of money - don't you run i to tax issues? I thought we could only gift max £3k a year?

Planning to sell our family house and buy three flats, giving one to each child.

@dancingdec There will be IHT to pay if we die within 7 years.

No tax on giver nor recipient at the time of the gift. Thing is that IHT may be payable on it if the giver dies within 7 years, but IHT comes out of the estate, so may or may not be borne by the donee by virtue of lower inheritance.

I’m in my mid-late 20s and finding this thread really interesting. My peers and I are all from solidly middle class backgrounds and have all bought in the last few years (so similar house prices to some of the older DC in this thread) in expensive parts of the country (including London, albeit not central!) None of us have had or expected anything like the financial aid here. We’ve all done just fine still with the ‘typical’ route of couples who have worked and saved hard. We’re all very grateful to our parents for our educational support growing up and for teaching us how to save and be savvy with money. Some have lived at home but the majority of us have managed to save and rent whilst still enjoying our 20s. We’ve just made compromises (e.g. renting a two bed flat as two couples) and we’ve bought starter flats or homes in cheaper areas. We’ve mostly had a smaller gifts (up to 10k - still incredibly generous!) to help with legal and moving fees and furniture. Our salaries have gone up and we’re able to upgrade to family homes in a few years just like our parents did before us. We’ve saved hard but it’s not been impossible at all and I feel really proud of our little flat. Interestingly, the one friend I have whose parents fret over how she’ll buy and save up for her and let her live rent free is terrible with money and incredibly bitter about the haves and have-nots! I’m so grateful for all my parents have given me and grateful that they’re enjoying their retirement and the lovely family home they worked so hard to achieve. Obviously I think it’s lovely how hard some posters here are saving for their DC but just wanted to add that it is still perfectly possible (for now!) to get started without big parental sacrifice.

you are in your mid twenties and have “worked and saved hard” and now own a property

you must have “worked and saved hard” for all of…. 5 years and that’s if you started saving hard at 21/22!

@Dingledanglebangle
Surely you read the news and are aware that bank of mum and dad are critical to the housing market these days?

Well this is my point - there are still large parts of the country where this is possible! Was just trying to give another view as I imagine plenty reading this thread won’t be able to make large financial sacrifices for their children …

you mentioned london
what “large parts”?
sure as heck not huge swathes of the south east!

@Dingledanglebangle

did you go to uni?

i left uni at 21, then graduate training scheme and lord of exam. i didn’t get in to really earning decently to make a substantial saving each month until i was 24.

you and your partner must have started work and immediately saving very seriously to then be able to buy a property at 25 in current climate

Yes we all went to university and most did graduate schemes also. Couple of years saving hard and then we all bought. Being in a couple has been the biggest benefit. I’m certainly not saying it isn’t hard and of course we don’t have the same choice as our parents did but we are all very happy and all have the scope to upsize in years to come.

My dad gave us all our inheritance early so we can all have a house now

fascinated to know your area where huge swathes are completely affordable to mid twenties in current day who “work and save hard”