You are here: Home - Retirement - Retirement planning - News -

Family gifting pushes equity release to record levels

0
Written by: John Fitzsimons
09/05/2018
Around one in four pensioners are releasing equity from their properties to support their family, the latest equity release market monitor from Key Retirement has revealed.

The numbers using their property wealth for gifting has jumped from 22% to 26% in the first quarter according to the study, with the money going towards house deposits, university fees, holidays and debt repayment.

Dean Mirfin, chief product officer at Key Retirement, said that gifting is a “major motivation” for equity release, adding it is more often a case of parents and grandparents wanting to gift rather than being asked for help.

He said: “They’re motivated by the desire to help when the money is really needed and being around to see the difference that it makes. In addition, the costs of equity release enable them to have some control over how the money is ultimately used.

“They are being helped in this by a very competitive market place with rates fixed for life at their lowest ever levels as increased competition and new lenders means rates on plans are lower than many mainstream lenders’ variable rates.”

Later life debt

However, tackling pensioner debt was also a big driver for sales in the quarter. Around one in five borrowers used the proceeds to pay down mortgage debt, while almost a third (30%) paid off credit cards and loans.

The average amount of equity released was a little over £74,000.

The amount released overall to the end of March jumped by 23% on last year to a record high of £777m, with plan sale numbers also increasing by 22% to 10,495.

Drawdown plans accounted for two-thirds (68%) of all sales, with enhanced drawdown making up 16% of overall sales. The remainder were lifetime mortgages.

See YourMoney’s Downsize vs equity release: what’s the right decision for you? for more information.

There are 1 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

How to get 5% interest without tying up your savings for years

You don't have to lock your money away to get an above-average return on your savings.
How to get 5% interest without tying up your savings for years

130 million old £1 coins still out there: what to do if you have one

An estimated 131 million old round £1 coins have yet to be returned to the Royal Mint, nearly three years afte...
130 million old £1 coins still out there: what to do if you have one

Can you get a £30 Iceland food voucher?

Iceland is giving away £30 vouchers to pensioners struggling with the cost of living.
Can you get a £30 Iceland food voucher?

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week