Retired homeowners made an average of £74,000 by releasing equity from their homes in the first three months of the year with a quarter of them using the cash to help their families.
That’s according to the latest research by Key Retirement, which discovered 26% of pensioners were using their released equity to pay for family members’ house deposits, university or school fees, debt repayments and holidays.
In fact, Key’s Q1 Equity Release Market Monitor revealed, 30 retired homeowners per day gave away some or all of the cash released from their homes in the first three months of the year.
And it disclosed the total value of the property wealth released to the end of March increased by 23% to a total of £777 million, with the number of plan sales soaring by 22%. These were both new record highs for the first quarter of the year, said Key Retirement.
The data also zoned into regional trends, identifying more than a quarter of equity release sales were in the South East of England.
But, when it came to spending the money, home and garden improvements was the most popular use of the cash with 63% of homeowners using released cash to enhance their property.
Clearing debt was another common use for the money with 21% using it pay off existing mortgages including interest-only capital repayments and 30% using it to pay off credit cards and loans.
Meanwhile, 31% of homeowners used the money to fund holidays.
Dean Mirfin, chief product officer at Key Retirement, said: “Gifting is a major motivation for equity release and our data shows it is more a case of parents and grandparents wanting to gift rather than children asking for help.
“They’re motivated by the desire to help when the money is really needed and being around to see the difference that it makes. In addition, equity release enables them to have some control over how the money is ultimately used.”
