My day job definitely immerses me in the world of the wealthiest individuals in society and I am conscious of this when I start to think about my finances. It would be very easy to get stressed about my lack of millions in the bank. A lot of my clients fund large house deposits for their children and many often gift their offspring a property outright when they feel that the time is right.
My children’s ability to get on the property ladder is something that I think about and it seems that I am not alone. The ONS published some quite worrying figures recently showing that working people face house prices of seven times earnings. Given that lenders are likely to lend 4 or 5 times your salary; this means you need a HUGE deposit to fill the gap.
I also read recently that Halifax found that 25% of 18-34-year-olds are relying on an inheritance to get on the property ladder. With increasing care costs, I feel there could be a lot of disappointed 18-34-year-olds out there.
So here are the things that you should think about when considering if this is a road that you want to go down:
- You can only do what you can! The amount that you can put by will be determined by your disposable income. Make sure you have built in your personal saving and retirement planning when working out your true disposable income
- The banking industry have responded by introducing family mortgages so that parents can help their children get on the ladder often by securing a loan on the parents’ home.
- I prefer to put money aside in my name (especially whilst the sums aren’t huge). This allows me to have control of when and how they would get access to anything that is earmarked for them.
- Consider investing the money rather than keeping it in cash if you are investing for 5/10 years or more. Currently, cash savings rates are not beating inflation.
Good luck with your saving!!
Lots of Love
Miss Lolly xx