Equity Release Could Ease the Burden of Student Debt
More parents plan to help their children through further education with financial assistance, according to Sainsbury’s Finance. Equity release schemes could be the answer for some parents wanting to help their children.
This information, garnered from 1,000 student interviews, comes after Key Retirement Solutions reported in July that 36% of equity release schemes are now used to help family members, particularly children.
With universities across the country soon to be flush with fresh-faced students, as well as those returning to commence their studies, Sainsbury’s findings showed that 53% of undergraduates are likely to receive some financial help from their parents.
This could lead to a combined total of £5.29billion spent by parents, with an average of £8,000 spent on each student child. Some parents (10%) are even willing to pay more than £20,000 with two in five likely to drain their savings to cover these costs.
An equity release scheme could prove to be a viable option for parents wanting to release some extra money. Equity release schemes have the ability to unlock tax-free lump sums or regular payments to help homeowners spend the money they need. Traditionally, these are schemes reserved for retired homeowners but the average age of those taking out such a scheme is slowly dropping.
As aforementioned it appears that equity release schemes are already becoming more popular with homeowners keen to help out their family in this difficult economic climate. In 2007 25% of KRS customers released equity for the purpose of helping their family. This has grown by 11% to 36% in 2009 and could yet grow further with more parents keen to help their children.
Steven Baillie, Head of Loans at Sainsbury’s Finance commented: “There is no doubt that university life is becoming increasingly expensive and financial contribution from parents is viewed as an integral part of the Government’s university funding. In the current economic climate, however, this can bring a real financial strain to many families.”
For no-obligation advice on whether equity release could help you and information on the best plans please call our 24 hour helpline and speak to one of our advisors:
Or use the comments box below to ask a question.
Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To understand the features and risks ask for a personalised illustration.
Age Partnership provides initial advice at no cost and without obligation. Only if you choose to proceed and your equity release case completes would a typical fee of 1.5% of the amount released or £795 be payable.
Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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