New research has found that 64% of equity release customers consulted family before going ahead with just 4% saying their family was sceptical about their plans.
Equity release adviser Key conducted what it claimed to be the first comprehensive study into the experience of customers over the past 20 years.
As part of the advice process, specialist equity release advisers actively encourage people to speak to their loved ones as this makes estate planning easier and a proportion of the equity released is often used for gifting.
The most common reason people chose not to involve their family or friends was not due to concerns about their decisions but rather ‘because it is none of their business’ (29%). In addition, 2% did not mention it as they did not want their families to feel guilty as they were looking to use the equity to help them and just 4% said that they did not mention it as they felt their family may react negatively.
With 22% of people using all or part of the equity released to support their families or friends over the last nine months, £605 million has been recycled and ploughed back into the economy.
Providing an early inheritance (62%) was the most popular reason for giving followed by help with a house deposit (51%) and helping with debt repayment (9%). 26% provided financial support for other reasons that range from helping with school fees to family holidays and 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.”
