My parents recently retired and still have some mortgage to pay. I'm thinking of helping
18 October 2021
Question by Jenny
Hello, my parents retired a few years ago and still have £25,000 to pay off on their mortgage. I’m thinking about helping them out and potentially loaning them the money to pay it off as they seem to be struggling recently.
Would I be able to do this and what problems might this cause?
Thank you, Jenny.
Answered by Justin King
What a lovely gesture. Are you planning to make a formal loan? This may be a great idea as it will be treated as a debt on their estate when they pass on and would not form part of their taxable estate. It can be on an interest free basis. You may want a solicitor to draw up a deed.
To secure your loan you would need to have a charge on their property. Again legal advice in needed.
If it's a pure gift you may struggle to get it back and it could be included in their assets if they need care in the future.
Hope that helps! Legal advice is recommended!
Chartered Financial Planner
I am a Chartered Financial Planner specialising in helping people retire successfully. I set up MFP Wealth Management, our family-run retirement planning firm in Mudeford, Dorset over 10 years ago to help people who have worked hard, enjoyed financial success, and are looking to reap the rewards as they approach retirement.