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Pensioners gift £40k of property equity to families

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
18/08/2016

Pensioners releasing equity from their homes are gifting an average of £40,000 to their families.

More than one in five retired homeowners are accessing the money in their homes to help out their children and grandchildren to improve their long-term finances.

New data from KeyRetirement.com showed that more than two-fifths of those unlocking equity in their home pass on around £20,000, but a generous 18% are gifting more than £50,000.

And 6% of the 4,000 surveyed said they had gifted more than £100,000 to their loved ones.

Much of the money is geared towards helping children get a foot on the property ladder with £33,350 contributed on average towards house deposits.

Other popular reasons include buying cars (£6,000), family weddings (£11,000) and starting new businesses.

An average of £24,780 also goes towards giving grandchildren a helping hand.

KeyRetirement believes the money raised through equity release is seen by many as the best early inheritance that they can give.

Dean Mirfin, technical director at KeyRetirement.com, said: “Attitudes to inheritance are changing as people recognise the many benefits of using property wealth to help their family and friends while they are still alive. By taking advantage of the tax free benefits of equity release many pensioners can control how the money is used as well as see the immediate benefits of the gift they are giving their loved ones. Many see this early inheritance as a much greater benefit today than their children inheriting from them later.”