"As soon as they have children, they should start putting away money separately, for university, property or weddings, so that this does not impact on their financial position. It is a matter of common sense and developing good habits.”
Mr. Gallacher concludes that affordability is a key consideration: “There is no magic money tree, to use Theresa May’s expression.
"In other words, there is no magic solution to create free money.” Mr. Steel agrees: “While cashflow planning is a powerful way of showing various scenarios before decisions are made, there is just no silver bullet for this dealing with this issue.”
While careful and effective planning, and realistic decision-making is key, to avoid releasing equity from property for children’s financial needs, creative thinking can provide other potential options too, as IFA Nick McBreen of Worldwide Financial Planning in Truro points out:
“People have many financial needs – for retirement, their children and other dependants, so they are looking at the locked-up capital in their house as a solution. But there are other possibilities they can consider.
“First of all, they need to get advice before they take any decisions. Mistakes can happen, otherwise.
"They also need to get over their ‘obsession’ about paying fees for advice and recognise that this advice will help them and their children.”
And then they can think laterally about the issues, and take action that keeps property wealth – avoiding an impact on the children’s inheritance, as Mr McBreen adds: “Some people are not aware of how much wiggle room they have, when it comes to what they can do with their house.”
“For instance, one solution I’ve seen clients apply is simply to swap house with your children. This means they get more room for their growing family and you get a smaller property that better suits your needs. There are legal fees, but the level of support this obtains for your family is immense.”
Another example of creative thinking for generating cash from your home, without denting the future inheritance is by making use of the government’s Rent a Room scheme, which allows earnings of up to £7,500 tax-free, from letting out furnished accommodation in your property.
As Mr. McBreen points out: “You can rent a room in your house out and gift the income to your children.”
Before making any choices though, he emphasises the importance of getting good advice first, as he concludes: “People need to have a plan and guidance, or they can end up in a horrible mess.”
Fiona Nicolson is a freelance journalist