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Meet Dawn and Leon – a semi-retired, married couple who have lived in their four bedroom home for 23 years. Here, they’ve raised their family and made some very special memories. But with their children flying the nest, they feel ready to downsize and focus on the future.
The couple have different ideas on the house they want. However, they’d love to be mortgage-free – and put the extra money towards holidays, retirement, and supporting the family.
"It was great supporting Dawn and Leon with their plans to downsize and potentially go mortgage-free."
Downsizing certainly isn’t a decision that can be made lightly. On one hand, this is a beloved, family home where memories have been made over decades. On the other, it could leave Dawn and Leon better off financially – and in a position to think more about their future.
If you’re thinking about taking this step, here are five tips to help you:
Take the time to consider which of your belongings you truly need. Space becomes a premium when downsizing. And it’s common to fall into the trap of paying for a larger home just to store items you rarely use.
If you wanted to keep some belongings in storage, over time this could be costly. But if you can downsize small enough to go mortgage-free, you may have more than enough money to cover these extra costs. Crunch the numbers to see if ultimately, storage is worthwhile.
When doing your calculations, don’t forget fees that crop up in the process. These might include agency fees, stamp duty, and conveyancer fees.
Downsizing could see you with a large sum of money from your house sale. And with potentially fewer outgoings, you may have more money to save each month.
This can mean anything from good public transport links to a downstairs bathroom. These important considerations may mean you don't have to consider moving again.
Skipton’s Senior Financial Adviser, Ammad Jawaid
Downsizing your home could make such a difference to you financially. After all, you may suddenly have a large pot of money from the sale of your property – which is of course a much-welcome financial boost. Yet it’s also an opportunity to build a brighter future for yourself, depending on what you do with it – and where you keep it.
Will this extra money help you better prepare for retirement? Do you want to use some of it to support your loved ones? We’re here to help you make informed financial decisions and work out what’s important to you. And if you’re comfortable taking some risk with your money, we can also take you through a range of investment and pension options. These could get your money working harder for you over time.
Your money is at risk with investing. Some areas of Inheritance Tax (IHT) planning are not regulated by the Financial Conduct Authority.
