In her latest article, Laura Richardson considers some of the key points that are involved with protecting your deposit savings in Chelmsford and throughout Essex . . .

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According to a recent survey by Nationwide Building Society, an average 20% deposit for a house purchase has now risen to above £80,000. This is an increase of around £30,000 over the last ten years. Saving for a deposit has become increasingly more difficult due to low interest rates alongside rising house prices. Nationwide have calculated that, on average, it could now take first time buyers up to 10 years to save for a house deposit in London. (In other areas, including Chelmsford, this falls slightly to 8 or 9 years.)

With deposit saving taking numerous years, this can leave potential buyers with large sums of cash sitting in their bank accounts. Andrew Douglas Wills & Legal Services have compiled a few points to consider if you are interested in protecting your deposit savings in Chelmsford and throughout Essex.

Unmarried couples:

  • If you are saving to buy a house with a partner, it is important to ensure that the cash will be protected should anything happen to you or your partner. If you are unmarried, then any cash that you hold when you die will not automatically be given to your partner. The only way to ensure that your cash will be given to your partner when you die is to make a valid Will which names your partner as a beneficiary.
  • Furthermore, it is also important to remember that if you are not married when you die any cash inherited from a partner is subject to Inheritance Tax.

Single savers:

  • As a single saver without a property, you may not have considered the importance of making a Will yet. However, as your cash savings increase you may wish to ensure that your savings would be passed on to a certain loved one or relative should the worst happen to you.

Alternative option:

Many first time buyers currently rely on “the bank of mum and dad”, or even grandparents to provide them with the cash amounts required to put down as a deposit. This can save time for potential buyers, but it is important to note the legal implications of accepting a cash gift from a relative. If your relative should happen to die within 7 years of gifting the cash, then you will be liable to pay Inheritance Tax upon the gifted amount. Inheritance Tax is currently charged at a rate of 40% so this can result in a hefty tax bill! However unlikely it may seem that your benefactor may die, it is important to bear this in mind when accepting large cash gifts.

We at Andrew Douglas Wills and Legal Services understand the importance of protecting your deposit savings in Chelmsford and throughout Essex and/or making a valid Will. With this in mind, why not contact us today to arrange a FREE initial consultation to discuss your needs in Chelmsford and throughout Essex? ————————————————————————————————————————————————————

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