60% of adult children (30–55 years old) are worried about their parents’ finances, according to research from equity release lender More 2 Life.
22% are worried that the state of their parents’ finances would stop them from fully enjoying the retirement they deserve and 20% of children are concerned about their parents running out of money altogether during retirement.
Meeting later life costs such as care are also a concern, with 18% citing their parents’ struggle to fund care as a major concern, while 19% believe that their parents would run into debt in the next five years if one or other required care.
When asked what financial steps they might support if their parents were struggling financially, 32% were happy with downsizing, 21% would be keen to see their parents release equity from their property and 19% would suggest selling the family home.
27% would be keen to provide financial support or a loan if their parents needed it while 12% suggested they might take out a personal loan or later life mortgage.
Dave Harris, chief executive officer at More 2 Life, said: “Speaking to advisers one of the comments that you hear is that clients don’t want to touch their housing equity as they want to leave an inheritance to their children. While this is something that most children are likely to appreciate, this research clearly highlights that not only do they worry about their parents finances but they would prefer them to take proactive steps to improve their financial situation if they are struggling.
“Whilst the equity release industry has experienced historic levels of lending in recent years, it’s crucial for lenders to continue working with advisers to raise awareness among families of the benefits of unlocking property wealth. Inheritance is a family concern but so is the fact that the older generation enjoys their retirement and can pay for costs such as care.
“Market innovation means that there are more products available than ever to meet individual client retirement needs but we need to work hard to ensure that people realise just how much the market has evolved. Advisers are key to educating people and their families so they – at the very least – start to discuss how housing equity can help solve some of the financial challenges they may face in the future.”