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Voluntary Select Options - William

Intergenerational wealth

William:

  • 76 years old
  • Owns £1.2m property in London
  • Wishes to gift money to his two grandchildren

William has owned his terraced house in London for over 20 years, and it has recently been valued at £1.2 million. His two grandchildren are earning good salaries but don’t have any savings to get them onto the property ladder.

William would like to gift them £50,000 each to go towards the down-payment for buying a property. He looks at taking a lifetime mortgage out against the value of his home to achieve this, as traditional lenders will not lend him the money because of his age.

He would also like to make sure that his grandchildren’s future inheritance is preserved, so would like the option to make payments. His grandchildren would also like to make payments when they can, because their mortgage payments will have been reduced by their increased deposit. 

By taking out one of our Voluntary Select Options, William can borrow the £100,000 he requires and he and his grandchildren are able to make voluntary repayments of up to 15% of the initial loan amount each year without penalty.

Knowing that circumstances can change, another concern for William was the possibility that they may not always be able to afford to make these repayments. With the Voluntary Select Options there are no penalties for not making repayments so William and his grandchildren can choose as and when to make the voluntary contributions.

Key benefits:

  • William can release cash to help his relatives onto the property ladder
  • Preserve future inheritance by making repayments
  • Complete flexibility on repayment plan – no penalties 

Important information

This case study is a worked example and is for illustrative purposes only. We have taken care to ensure the information is accurate, but we accept no liability for any of the information we provide that you decide to use or for the suitability of any of the statements made. Individual financial advice and tax advice should be sought prior to taking out a lifetime mortgage, as releasing equity can change the inheritance tax position of the borrower and their estate, as well as potentially altering their eligibility for welfare benefits.

You can find out more about our Voluntary Select Options here

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Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

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Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.