How Mrs Baxter helped her grandchildren's education

Eager to help her grandchildren but not having liquid funds left Mrs Baxter faced with a challenge.

Roshan

3/22/20241 min read

woman sitting on seashore
woman sitting on seashore
Mrs Baxter - Helping grandchildren's education

Challenge: Mrs. Baxter wanted to financially support her two grandchildren through university. Each grandchild required £50,000 for the first year, with the same amount needed annually for the next four years. However, Mrs. Baxter lacked sufficient savings and was hesitant about additional borrowing.

Solution: Mrs. Baxter consulted Martin, a whole-of-market equity release advisor. Martin conducted a detailed fact-finding conversation to understand Mrs. Baxter's financial situation and goals. Her property, valued at £800,000 and free of any mortgage, held significant equity.

Recommendation: Martin proposed a Lifetime Mortgage with an initial release of £100,000, covering the first year of university costs for both grandchildren. Additionally, he recommended a reserve facility of £300,000 for future use. This reserve allows Mrs. Baxter to access additional funds in the following years for ongoing university expenses without accruing interest until she makes a withdrawal.

Outcome: Mrs. Baxter was thrilled with this solution. The equity release provided the necessary funds to support her grandchildren's education without depleting her savings or incurring additional monthly payments. The reserve facility offers her peace of mind, knowing she has access to future funding needs without immediate interest charges.

Benefits:

  • Supported Grandchildren's Education: Mrs. Baxter could actively help her grandchildren achieve their educational goals.

  • Maintained Financial Security: Equity release allowed her to access property wealth without selling her home or incurring high monthly payments.

  • Flexibility: The reserve facility provided future access to funds without accruing interest until used.

Key Takeaways:

  • Equity release can be a valuable tool to help seniors achieve financial goals like supporting family members.

  • Consulting a whole-of-market advisor ensures a personalized solution tailored to individual circumstances.

  • Equity release products offer various features like reserve facilities, providing flexibility and control over accessing funds.

This case study demonstrates how equity release can be a viable option for seniors like Mrs. Baxter, allowing them to support loved ones while maintaining financial security and peace of mind.