Grandparents and parents have gifted over £2.1bn to younger relatives since the start of January 2020, new data analysis from equity release adviser Key Later Life Finance shows.
This is 17% of the total amount released (£12.1bn) and suggests that supporting wider family members is a key driver for many equity release customers – even during the pandemic and current cost of living crisis.
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 – when arguably many have already reached some significant financial milestones such as buying a house – gifting can be vital to give younger members of the family a head start.
Londoners (39 years) receive the earliest inheritance with families more likely to gift if possible, to help people take their first steps onto the ladder in what is the UK’s most expensive housing market.
Amount Gifted by Value and Volume (Q1 2020 to Q3 2022):
| Region | Equity Gifted Since Jan 2020 | Average Amount Gifted | Average Age of Inheritance |
| East Anglia | £93,344,566 | £55,704 | 48 |
| East Midlands | £118,217,663 | £50,746 | 46 |
| London | £616,027,339 | £168,688 | 39 |
| North East | £37,746,962 | £41,483 | 41 |
| North West | £111,699,044 | £42,556 | 49 |
| Northern Ireland | £7,683,140 | £33,324 | 46 |
| Scotland | £64,851,512 | £43,732 | 56 |
| South East | £643,121,851 | £88,588 | 54 |
| South West | £207,120,089 | £65,636 | 53 |
| Wales | £48,334,302 | £44,211 | 48 |
| West Midlands | £113,718,705 | £51,873 | 47 |
| Yorkshire & Humber | £73,010,341 | £42,162 | 49 |
| Across UK | £2,134,875,513 | £75,337 | 47 |
Interestingly, while the Stamp Duty Holiday ran from July 2020 to September 2021, even against the backdrop of the cost-of-living crisis, we’ve only seen a slight decrease in the proportion of older homeowners looking to boost the younger generation onto the property ladder.
Providing an early inheritance when it makes the most financial sense was also popular as the repayment of debts. We’ve also seen practical support such as buying a new car, funding university or paying for a wedding increase as well as the world returned to a more normal post-Covid approach.
| % of people using equity release for specific reasons | Q3 2020 | Q3 2021 | Q3 2022 |
| New car | 4% | 4% | 5% |
| Help with house deposit | 48% | 46% | 43% |
| University fees | 4% | 4% | 6% |
| Early Inheritance | 45% | 69% | 63% |
| Repaying debts | 12% | 6% | 10% |
| Wedding fund | 4% | 4% | 6% |
Will Hale, CEO of Key, said: “While there is no doubt that people are using the equity tied up in their homes to support their own financial needs, parents and grandparents are keen to use the funds to support their wider family.
“Whether it is helping them to take their first step onto the property ladder, provide an early inheritance or help them to repay debts, the older generation has directly gifted more than £2.1bn since the start of 2020.
“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. Speaking to a specialist adviser will help you to explore all your options which could include downsizing, equity release and other later life lending products.
“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.”
