Giving your children an early inheritance, rather than waiting until you pass away, can help them during key stages of their lives.
Here are four examples of how you can enhance their financial security during your lifetime:
- Home deposit: Paying some or all of your child’s deposit can help them break into the property market, avoid expensive mortgage insurance and build equity for their future.
- Mortgage repayment: Contributing to their mortgage, either via an offset account or extra repayments, can reduce the interest paid and shorten the loan term, saving them money over time.
- Reducing education debt: Reducing your child’s student loan debt can free up their cashflow and help them cope with the rising cost of living and any unexpected expenses.
- Kickstart investments: Giving a small sum can motivate your child to develop a savings plan, helping them to combat inflation and build long-term wealth.
Gifting to your children can have a meaningful impact on their lives, but it’s important to balance this generosity with your own financial needs and lifestyle choices. Seek professional advice to help you understand the financial, legal and tax considerations.
If you’d like to explore your options, please feel free to contact us to arrange a discussion. We are here to help you navigate this complex topic.
This post was adapted from the Financial Knowledge Centre. You can access the full article here.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs. For further information on anything that has been discussed in this article, please consider seeking qualified and professional advice.
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