Some 95% of the pre-retired said they would prefer their parents to spend their money on themselves, while 81% of those already in retirement said leaving an inheritance was of vital importance to them.
The survey also showed that the key component of any inheritance remains the parental home, with 82% of the pre-retired expecting to inherit this at some stage. This is substantiated by the fact that 95% of retired people said they planned to stay in their home as long as they could. However, once inherited, any property was viewed primarily as an investment, with 88% of the pre-retired declaring that they would sell it.
Nigel Barlow, Marketing Manager, at Just Retirement, comments: “This research, together with our earlier survey on increasing life expectancy and decreasing pension savings, again shows that those in or approaching retirement see property as part of their net wealth and not just as a place to live. It follows that financial services companies and financial advisers should be grasping the nettle and providing the sort of innovative solutions that will allow people to use this valuable asset to provide both income and capital.”
Other key findings in the survey include that 53% are concerned that their parents are not as well-off as they would like and that 57% of the pre-retired believed their parents would benefit from a boost in retirement income - though 84% did not want their parents to be pushed into moving home.
But, again, this contrasted to the attitudes of those already in retirement, where 82% said they were happy with their standard of living and only 36% said they would like to boost their income. There was significant regional variation, however, with 50% of those in the South, Midlands and Wales wanting additional income but with only 12% of Scots expressing the same desire.
Given that equity release is a key way of boosting income in retirement, both groups were asked specifically about their awareness and understanding of such products.The results were disturbing, however.
Although awareness of equity release was high, with 89% of the pre-retired and 84% of the retired groups being aware of its existence, their understanding of the details was sketchy and confused. For instance, while 38% of both groups knew that equity release involved release or selling some equity in their home only 26% of the pre-retired and 16% of the retired were aware that the loan is paid back when you die. Additionally, only 16% (of both groups) realised that they could take either a lump sum or income from the plan. There was also resistance to the idea of equity release plans from both groups, with 39% of the pre-retired and nearly 50% of the retired expressing concern about the plans.
Nigel Barlow at Just Retirement, continued: “This and our other research indicates that resistance to equity release is largely due to lack of understanding, which demonstrates the need for further education on all aspects of this product area.
“It is very clear that there will be a significant requirement for a wider range of more flexible equity release products, as more and more people begin to see property as a part of their total asset mix. Only 5 months ago, the Institute of Actuaries published data suggesting that around 4.3 million people could benefit from these schemes.”
Just Retirement’s Inheritance Research was conducted through face-to-face interviews with 221 people split almost equally between the pre-retired (aged between 35 and 64) with retired parents, and those already in retirement, age 65 or over.
