A bi-annual vulnerability report released by more2life reveals that later-life lending customers are twice as likely to include their families in equity release decisions now than before the pandemic.
Family participation in these discussions rose to 44% in 2023 from 19% in 2019, influenced by the effects of the pandemic and the ongoing cost-of-living crisis.
The report, which surveyed over 330 independent advisers, underscores the importance of family involvement in the equity release advice process, with 84% of advisers agreeing that this allows for open airing of concerns. Despite this, advisers found that 50% of older homeowners are reluctant to involve their families due to not wanting to burden them with worries.
Interestingly, 85% of families were generally pleased that their older relatives were taking steps to secure their finances, contrary to the homeowners’ concerns. Furthermore, 77% of advisers believe that boosting family involvement in the process could potentially reduce the number of complaints lodged, with the Financial Ombudsman Service (FOS) only upholding 12% of the 391 complaints about equity release in the year ending March 2023.
The study also shows a shift in attitude towards financial independence. While in 2021, 83% of advisers suggested that adults did not want to involve family members in day-to-day financial decisions, this figure dropped to 74% in 2023. Clients are increasingly viewing family involvement not as a loss of independence, but as a normal part of financial planning.
Ben Waugh, managing director at more2life, said: “The rise of the “pre-inheritance” and the impact of the pandemic followed closely by the cost-of-living crisis has encouraged families to have more open financial discussions.
“It is heartening to see that family involvement is up significantly as the proceeds from later life lending are often used directly or indirectly to support loved ones.
“We need to continue encouraging these discussions and reduce the misconception that involving family could impact a borrower’s independence.”
Waugh added: “Whether a client is vulnerable or not, family involvement is vital. Robust discussion and a greater understanding of the reasons behind the eventual decision can help to not only avoid complaints but ensure that families do not receive a shock at a later date.”
