According to More2Life’s bi-annual vulnerability report, around 43 per cent of later life lending customers involved their families in the equity release process in 2023, compared to 19 per cent in 2019.
The research added that 84 per cent of advisers agreed as they thought involving families in the equity release process would be beneficial so concerns can be addressed.
Over three quarters of advisers said family involvement would lead to fewer complaints lodged against them.
The Financial Ombudsman Service upheld 12 per cent of 391 complaints in the year ending March 2023.
In 2023, 74 per cent of advisers said the biggest barrier to involving families in equity release was not wanting to include them in the day-to-day financial decisions. This is down from 83 per cent in 2021.
Half of advisers polled said clients did not want to worry loved ones with their financial decisions, meaning at times advisers had to reassure clients and encourage family involvement, especially in the cases of vulnerability.
Opening up to family
In nearly a third of cases, clients did not want to involve their family as they were too proud to admit that they needed financial help.
However, 85 per cent of advisers said families were pleased to see relatives take steps to improve their quality of life.
Around two thirds of advisers said client’s families were interested in how equity release could help their financial situation.
Only 13 per cent of families were uninterested in a later life lending claim, and 10 per cent of advisers said families were surprised about their relative’s financial situation.
Ben Waugh, managing director at More2Life, said the increase of “pre-inheritance”, along with the pandemic and cost of living crisis, had encouraged more families to have “more open financial discussions”.
He noted: “This has translated into twice as many older borrowers involving family members in later life lending discussions – a natural evolution as the proceeds are often used directly or indirectly to support loved ones.”
However, he said some borrowers were still worried about involving their family as it would “raise concerns” or they could find their “independence is impacted”.
Yet, on the flip side the majority of advisers said family members are generally “pleased to see them taking steps to improve the quality of their retirement and delighted when they find that they might also benefit”.
“Whether a client is vulnerable or not, family involvement is vital – especially as the choices around products, features and interest rates can impact the estate over the long-term. Robust discussion and a greater understanding of the reasons behind the eventual decision can help to not only avoid complaints but ensure that families do not receive a shock at a later date,” Waugh said.
