Enquiries About Using Equity Release For ‘Gifting’ Rise During Lockdown As Older Homeowners Look To Help Younger Generations

Over 50s experts SunLife have seen an increase in the number of homeowners looking to release equity from their homes to help younger generations whose finances have been further hit by lockdown.

SunLife’s equity release director, Simon Stanney, says the main reasons people generally opt for equity release are; to enhance their own lifestyles – either by improving their homes or funding holidays and other large purchases, to boost disposable income, to pay off debt or to gift to family.

Gifting is often for things like weddings, university fees, and, perhaps most commonly, helping children buy their first home, with many parents keen to help because they feel getting on the property ladder is harder now than it was for them.

Usually, those looking to release equity in order to improve their own lifestyle makes up the bulk of enquiries but recently, SunLife has been receiving more enquiries from older homeowners looking to use the equity in their homes to offer support to loved ones who are struggling with the added financial pressures lockdown has brought.

“We have definitely seen a shift in the reasons why people are enquiring about equity release since lockdown started from the more traditional ‘enhance’ to ‘gifting’,” said Stanney.

“I think with so many people suffering financially it’s understandable that older homeowners  – who have built up equity in their homes and are in a position to help – will be looking to support family in any way they can.”

The average house price in the UK has risen from £58,250 in March 1990, to £84,620 in March 2000 to £231,855 in March 2020*, so those homeowners who have had their homes for 20 or 30 years will have seen them rise in value significantly; equity release lets them access that cash without having to move or downsize.

The money is tax free and they can use it however they like, which means they can gift it to family if that is what they want to do.

Stanney concludes:

“In many cases, the family home would be inherited by the children anyway; equity release allows the gifting of that money when needed”

“Our blog https://www.sunlife.co.uk/equity-release/helping-the-family-with-equity-release/ explains more about how equity release could help you live a more comfortable retirement and give some money to those you care about most.”

It is important you take independent financial advice if you’re considering equity release. SunLife offers an equity release service with free initial advice – call 0800 633 5566. This is an initial advice service with expert advisers. However, you should also seek independent advice.


* https://landregistry.data.gov.uk/app/ukhpi/browse?from=1990-03-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Funited-kingdom&to=2020-03-01

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