Grandparents and parents have gifted over £2.1bn to younger relatives in the last two years, new data from Key Later Life Finance has indicated.

Since the start of January 2020, this is 17% of the total amount of equity released, which stands at £12.1bn, and Key said this suggests supporting wider family members has become a key driver for many equity release customers.
 
The equity release adviser’s data showed that over-55s in London (£168,688) who have benefitted from significant house price growth are able to gift the most followed by those in the South East (£88,588) and South West (£65,636). 

However, even those in Northern Ireland (£33,324) and the North East (£41,483), who provided the most modest gifts, provided enough to boost a younger member of the family onto the property ladder.

With the average age of inheritance in the UK sitting at 47 years, which Key highlighted could be an age when many have already reached some significant financial milestones such as buying a house, the equity release adviser stated that gifting can be “vital” to give younger members of the family a head start.

Key CEO, Will Hale, said: “Even though the cost of living crisis is being felt across all age groups, over-55s homeowners 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. Especially in this inflationary environment just the cost of meeting day-to-day living expenses can increase quickly over time.

“Also, as more people live for longer, an individual’s or couple’s circumstances may change significantly through later life with things such as health issues resulting in unexpected costs or the loss of a particular source of income.

“Equity release products are more flexible than they have ever been and allow ad hoc capital repayments as well as ongoing interest repayments so any borrowing can be carefully managed but the choice needs to work for all members of the family – both young and old.”

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