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

Nick Cheek
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Nick Cheek

Equity release borrowers have gifted £2.1bn to children and grandchildren to help them reach their financial goals.

New research has found that 17% of the £12.1bn released from later-life lending since January 2020 was used for gifting to family members, according to specialists Key Later Life Finance.

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 has been 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% of borrowers in Q3 2022, down from 46% last year and 48% in 2020. 

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

A smaller percentage (6%) used the money for university fees, a further 6% for a wedding fund and5% 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.”