Almost one in five parents and grandparents aged over 55 are accepting a lower standard of living to help their loved ones onto the housing ladder, research by Legal & General and Cebr has revealed.
28 Aug 2018
Bank of Mum and Dad Report 2018
This year, the Bank of Mum and Dad is increasingly using equity release to help the homeownership ambitions of relatives. Legal & General’s research found that nearly 44,000 housing transactions, roughly 14% of all BoMaD transactions, were partly or wholly supported by equity release, nearly double the number using annuities and over twice as many as those relying on taking out a loan. However, it remains a largely underutilised source of funding, with just 4% of over 55s saying they had used equity release.
The research also found that BoMaD lenders were unlikely to take advice in regard to the impact their giving may have on their own financial future. Before gifting money to help family or friends onto the housing ladder, more than three-quarters (77%) did not speak to a professional adviser or even seek information online.
Chris Knight, CEO, Legal & General Retail Retirement: "Parents and grandparents across the UK are often digging deep into their pension pots to support loved ones, balancing the housing needs of their children and grandchildren with their own retirement goals. Worryingly, in the majority of cases these individuals aren’t taking advice before they ‘lend’."