Student debt is a growing concern. The House of Lords economic affairs committee revealed that the student loan book would grow to over £1 trillion* over the next 25 years. This means that student debt is piling up for future generations.
If your children or grandchildren are approaching university age, you may well be worried about the debt they will face when they graduate.
With students paying up to £9,250** a year they may graduate with a large student debt. This could prevent them from getting on the property ladder or living comfortably. No doubt you want them to have the best education and pursue their dream careers. But the fact is that many simply won’t be able to afford this option.
You might be able to help with their student debt
If you want to help, then there is a way. If you’re a homeowner aged over 55 then you could release some of the cash built up in your home.
Equity release schemes, in the shape of a lifetime mortgage or home reversion plan, allow you to release tax-free cash from your property.
The best equity release deals are available through equity release advisers. It’s always best to seek advice from an independent adviser who can search the whole market for you. With equity release, you can use the money for anything you like, and unless you opt for an interest only lifetime mortgage, there are no monthly repayments.
This gives you a way to help alleviate the burden of student debt for a family member. You can enjoy seeing them graduate and pursue their chosen careers. Many people don’t utilise the money tied up in their property but equity release allows you to use the funds to make a difference during tough economic times.
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration. Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the UK.
* www.bbc.co.uk 2018
** www.ucas.com 2018