Older homeowners accessing property wealth often consult their family first, new research from Key has revealed.
According to Key, nearly two thirds (64%) of equity release customers spoke to family before going ahead, with just 4% saying their family expressed scepticism about their plans.
Of those opting not to speak to family first, 29% said it was because it was not their business, while 2% were concerned their families would feel guilty as they were using the equity to help them and 4% said they worried their family may react negatively.
Key’s research showed that as many as one in five (22%) equity release customers used all or part of their equity to support their families and friends over the last nine months, with the main reason being to provide an early inheritance (62%).
Meanwhile, just over half (51%) chose to use the equity to help with a house deposit, while 9% did so to help with debt repayment. Just over a quarter (26%) provided financial support for other reasons ranging from helping with school fees to funding family holidays and buying moving in gifts.
Will Hale, CEO of Key, said: “Discussions around inheritance or the financial position of older relatives can often be something that families avoid but as part of the equity release process, we actively encourage people to consult their nearest and dearest on the options being considered. It is great news that almost two-thirds are happy to have this discussion but we would certainly be keen to see this proportion increase – especially as one in five use the proceeds of equity release to support relatives.
“Far from being the preserve of the wealthy, inter-generational wealth transfer or gifting is becoming far more commonplace as people increasingly realise the impact of a timely boost to the finances of children and grandchildren. Naturally, people need to ensure that providing a gift doesn’t damage their own financial security which is something that a specialist adviser will discuss with them. However, the use of housing equity can be a pragmatic way for many people to achieve this objective.”
