Some 26% of retired homeownersusedequity release in the South West last year and 25% in Yorkshire & The Humber used some or all of the cash to support children.
More than one in four older homeowners in the South West are using their property wealth to help out families, equity release adviserKeyhas found.
Some 26% of retired homeownersusedequity release in the South West last year and 25% in Yorkshire & The Humber used some or all of the cash to support children.
WillHale, chief executive at Key, said: “Retired homeowners in the South West and Yorkshire & The Humber are making full use of the property wealth they have accumulated to enhance their standard of living in retirement and help their families.
“Intergenerational fairness is a hot topic at the moment and increasingly we are seeing people choosing to provide family and friends with the financial boost they need to clear debts, fund university fees and pay for house deposits and weddings.
“However, equity release is not a single use product and as well as helping family, older homeowners also use it to pay off their own debts, improve their homes or gardens and paying for holidays.
“Good independent expert advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”
Average pay-outs from homes across the South West last year were around £66,000 with more than £420m of property wealth released,whileaverage pay-outs from homes across Yorkshire & The Humber were around £57,350 with more than £242m of property wealth released.
Money gifted to families is typically being used to clear debts, pay for significant life events such as weddings or to fund house deposits. Key’s figures show other major uses of gifts are to pay for large family holidays, fund university fees or buy cars.
While over one in four, 26% in the South West, and 25% in Yorkshire & The Humber, use equity release to help family and friends, 65% use it to fund home and garden improvements – re-investing some or all the money in their houses so that they can stay in their homes.
Debt worries however remain a concern in the region – 32% of retired homeowners in the South West and 31% in Yorkshire & The Humber paid off credit cards or loans with their property wealth while 23% in the South West and 19% in Yorkshire & The Humber cleared existing mortgages.
Key also found retired homeowners in the North East are the most likely to use housing equity to pay off credit cards and loans.
Around two out of five (39%) older homeowners in the North East are using some or all of the cash they receive from equity release plans to clear unsecured debts such as credit cards.
This is higher than the national average (31%) and significantly higher than those in Scotland (24%) who are the least likely in the UK to use their housing equity for this purpose.
Average pay-outs from homes for equity release customers in the North East last year were £53,372 with £138.56m of property wealth received by retired homeowners.
Around one in four (24%) used the money to pay off existing mortgages highlighting how debt repayments are a major drain on standards of living in retirement.
However, the most popular use of the money in the North East is for funding home and garden improvements with 56% re-investing some or all the money in their houses so that they can stay in their homes.
Around 36% used the money to pay for holidays while 13% used some of their cash to help out family.
Hale added: “Debt is a major issue for people in retirement with many finding that they have finished work but haven’t cleared their debts or that they need to use credit to pay for unexpected expenses.
“We also see some people who having climbed onto the housing ladder later than anticipated or taken out an interest-only mortgage and either need to repay a lump sum or make ongoing mortgage repayments into retirement.
“This can be extremely stressful but property wealth is making a major difference to standards of living in retirement with customers using the cash to repay debt, improve their homes and even go on holiday.”
