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Over-55s gift £2.1bn to support family financial goals

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  • 22/12/2022
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Over-55s gift £2.1bn to support family financial goals
Equity release borrowers have gifted £2.1bn to children and grandchildren to help them reach their financial goals.

Data from Key Later Life Finance assessing the uses of equity release and the amount borrowed found that 17 per cent of the £12.1bn released since January 2020 until now was used for this purpose. 

Homeowners in London have put house price growth over the period to use and gifted an average of £168,688 to family members. In total, £616m has been gifted by older homeowners living in the capital. 

This is followed by the South East, where an average of £88,588 is given and the South West, where £65,636 is gifted on average. 

The smallest amounts are gifted in the North East at £41,483 and Yorkshire and Humber at £42,162. 

Across the UK, the typical gifted amount is £75,337 and recipients have an average age of 47. The region with the youngest recipients is London, where the average age is 39 and the oldest is Scotland at 56. 

 

Equity release use 

Although the stamp duty holiday fuelled purchase activity during this period, there was a small decrease in the number of people gifting relatives money to get on the housing ladder. 

This accounted for 43 per cent of borrowers in Q3 2022, down from 46 per cent last year and 48 per cent in 2020. 

The largest share of people, 63 per cent, gifted the money as an early inheritance. Compared to last year, this was down on 69 per cent but higher than 2020’s 45 per cent. Repaying debts was the next most popular use in Q3 2022, accounting for a tenth of people. 

Some six per cent used the money for university fees, a further six per cent for a wedding fund and five per cent used equity release for a new car.  

Will Hale, CEO of Key, said: “Even though the cost of living crisis is being felt across all age groups, over-55s remain keen to share the benefits of sustained house price growth with their wider families to help them achieve their dreams when it will be most beneficial. This is no small thing and the type of every day intergenerational fairness that comes naturally to many people. 

“However, while as a parent or grandparent, you want to help younger members of the family, it is vitally important that you consider the implications of this gift on your own finances. Speaking to a specialist adviser will help you to explore all your options which could include downsizing, equity release and other later life lending products.”   

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