We regularly hear and see comments about the role of the ‘Bank of Mum and Dad’. This comes as no surprise as many who already retired are now in a position to provide additional funds for their children.  Many are happy to do so as they can see the benefits of the money and the way it’s being spent today rather than their children receiving the cash on their death, by which time they may not need the money so urgently.

However, it’s all too easy to forget the role that Grandparents often play providing cash, not just to their children but also to their grand-children.

Twice in the last few years clients have wanted to raise money to pay educational fees. In both cases this was due to their son being made redundant and, rather than see the grandchildren taken out of their private school, the Grandparents wanted to release equity in their home to pay for school fees.

Equity Release enabled the Grandparents to make the financial contribution needed to provide their grandchildren with ‘the best education they can afford’ and do so in their present school where they were happy and settled. In these situations I’m reminded of the start to the television series, The Inbetweeners where one of the cast members, Will, has been pulled out of private school as his mother can no longer afford the fees due to her divorce and we then see the harassment he receives from fellow school pupils when moved to a state school.

I’m sure that this series isn’t a true representation of what would happen but I guess that the thought of moving children from private to state education doesn’t appeal to those involved.

And we’re not just talking about providing educational fees. We regularly see grandparents, who are in a better financial position than their children, providing the deposit for the grandchild’s first home. They are effectively by-passing their children’s inheritance to enable their grandchildren to get onto the housing ladder.

I just hope that when this is done that the work carried out by their solicitors protects the money should the grandchildren later marry or enter into the purchase of a property on a joint basis with a future partner.

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