Wealthy homeowners are twice as likely to use equity release to treat family and friends, new research shows.
As property wealth increases so does the percentage of the payout that homeowners gift to loved ones, according to research from over 55s retirement specialist Key Retirement.
Its equity release Market Monitor, published today, found that 25% of all customers state gifting as one of the reasons for releasing equity from their homes but this doubles to 50% for those with a property valued over £1 million.
The percentage of customers gifting increases in line with their property value and this becomes more pronounced from the £500,000 plus bracket.
Dean Mirfin, technical director at Key Retirement, said: “Using equity release to gift is seen by many as the best early inheritance that they can give, and one which may well have a dramatic effect on their families’ longer term financial wellbeing.
“It is significant that many who gift have great motivation for doing so, firstly they can control how the monies are used and secondly they can see the impact that the gift has now and over time.”
Mirfin said popular reasons for gifting include helping children get onto or move up the property ladder, helping with university fees and helping families with their day-to-day living costs.
He added: “The view that equity release is about “spending the kid’s inheritance” is clearly far from the case for many customers who actively use the money to provide an early inheritance at a time when they believe the money will have a greater impact on their families’ financial wellbeing.”