Are you thinking of taking out an equity release plan? If so, what will you use the money for? While some people will be using the proceeds for themselves – perhaps to make home improvements, pay off debts, boost their retirement income, or even to pay for that once-in-a-lifetime holiday – it seems that others have a more generous goal in mind, particularly if they own a pricey property.
The research, from Key Retirement, found that as property wealth increases, so too does the percentage of customers gifting some of their equity release proceeds to friends and family. In fact, retired homeowners with higher property values are twice as likely to treat others when they take out equity release: 25% of all customers state "gifting" as one of the reasons for releasing equity from their homes, but this doubles to 50% for those with a property valued over £1m.
The gift that keeps on giving
The fact that generosity increases in line with property value comes as little surprise. Those with higher-value properties will be left with a bigger cash sum when they release equity, so may be more inclined to be generous – or simply better able to afford this kind of generosity.
Dean Mirfin, technical director at Key Retirement, said that popular reasons for gifting include helping children get onto (or move up) the property ladder, contributing towards university fees, and helping families with their day-to-day living costs, "typically in the early years of their own children starting a family".
Many also use it as a chance to give their children an early inheritance, allowing them to see the impact that the gift has over the long term, with this kind of giving having the potential to dramatically improve their families' financial security.
"The view that equity release is about spending the kids' inheritance is clearly far from the case for many customers who actively use the money to provide an early inheritance at a time when they believe the money will have a greater impact on their families' financial wellbeing," concluded Dean.
So, will you be using equity release to give some money to your family? Whether you're taking the plunge for this or any other purpose, you need to make sure you're getting the best deal possible – and that it's the right decision for you in the first place. Consult our no obligation equity release service to find out more.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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