Covid-19 to spark rise in equity release for intergenerational support

The data shows that 20% of those considering equity release say that the pandemic’s impact on their broader family’s finances has meant that they’re more likely to take out the product.

69% of over 55s say they have helped their adult family financially in the past in some way, most commonly just to make ends meet (30%), while 23% took out money to help family pay off debts.

An ONS report in 2019 suggested that as many as 3% of the UK’s general population – 1.3 million people – are emotionally and financially supporting both their parents and their stay at home children.

An Opinium survey from April 2020 found that 16% of over-55s who have used equity release did so to help family members.

Currently, while the economic situation means 42% would rather pass money onto their family whilst they’re alive to help them out, only 14% think that equity release is an option for this.

Paul Bridgwater, OneFamily’s head of lending proposition, said: “This is not a problem that’s going to go away on its own. The Sandwich Generation are caught in the middle, caring for a generation either side of them whilst some of them are also trying to juggle their own work alongside their busy lives.

“Equity release has come under some focus recently, but here is an example of how a not insubstantial group of people could benefit from being given good advice that would help to relieve the pressure on their lives.

“With the right product they could free up wealth in their own property to find that deposit for their children’s first home and help them with some much-needed financial support. Equally, equity release could be a solution to enable greater care support to their parents and give the Sandwich Generation a much-needed break.

“Equity release isn’t right for everyone, but clearly there are some important social needs that could be met with careful, focused wealth planning.”