One in four over-50s have gifted cash to family: Helping with house deposit most common reason


One in 4 mother and father over 50 years outdated have given a major money reward to their household within the final 5 years, it has been revealed.

A complete of £38billion was gifted to assist family members, in line with the analysis by life insurance coverage agency SunLife.

Of those that gave cash, the most typical motive was to assist their kids purchase a house. Some 26 per cent of gifters did so because of this, contributing £26,680 on common.

One in 4 mother and father over 50 years outdated gave a major money reward, to assist their kids onto the property ladder

SunLife’s examine additionally discovered that the overwhelming majority of over-50s who’ve helped out their household financially stated gifting money resulted in a rise in their very own total happiness.

Of those that gave a money reward to assist their kids or grandchildren get onto the housing ladder, 76 per cent reported an uplift in their very own happiness. 

And of that group, 71 per cent stated doing so considerably improved their happiness, with the remaining 29 per cent saying it had ‘barely improved’.

The truth that giving money improves total happiness amongst individuals over 50 can be mirrored of their attitudes round whether or not they’d fairly reward cash now, or guarantee they go away one thing behind once they have gone.

Releasing some of the equity in a property can help older homeowners share their wealth with their children

Releasing among the fairness in a property may help older householders share their wealth with their kids

SunLife’s stated half of over 50s – at 49 per cent – want to go away some inheritance to their household after they’d gone, with 10 per cent saying they might even reduce on retirement spending to make sure they may go away an inheritance.

Nonetheless, 46 per cent are extra focused on their cash being spent whereas they’re alive, with 27 per cent selecting to spend it on having fun with their retirement – even when it means no inheritance – and 19 per cent preferring to provide an early inheritance to allow them to see their family members spend the cash. 

Of these respondents who’ve taken out fairness launch, 12 per cent stated they launched the money to supply monetary help to household – £12,525 on common. 

Fairness launch permits householders over 55 the choice to entry among the money tied up their houses, to assist with calls for on their funds reminiscent of debt repayments or dwelling renovations. 

Fairness launch has endured a poor popularity previously after clients suffered ‘extreme’ monetary knocks. The sector has been criticised for encouraging individuals to tackle debt, significantly in a while in life.

There have been different considerations about fairness launch, reminiscent of clients falling into destructive fairness the place the worth of a property is lower than the mortgage taken out in opposition to it when home costs fall.

Previously, clients have additionally fallen foul of the small print on their fairness launch loans with regards to early-redemption penalties – reminiscent of {couples} who should pay an exit price until each of them want to enter care.

Raising a deposit is a barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations

Elevating a deposit is a barrier to getting on the housing ladder, with rising numbers of first-time consumers having to depend on monetary assist from older generations

SunLife requested those that have not taken out fairness launch, however would think about it,  what they might spend it on in the event that they did. 

The survey discovered that 17 per cent would spend at the very least among the cash on early inheritance, totalling a median of £32,097. One other 15 per cent stated they might spend it on household items, costing them a median of £20,600, and 10 per cent stated they might spend it on monetary help for household, giving a median determine of £38,808.

Of those that have taken out fairness launch, 13 per cent report spending among the cash on household items – a median of £4,043 – and seven per cent on early inheritance – a median of £11,100.

Ian Atkinson, of SunLife stated: ‘It is clear to see that serving to household out financially is a precedence for a lot of, whether or not or not it’s early inheritance or extra particular help reminiscent of assist with a deposit for getting a house – and that is very true amongst those that retired, with 29 per cent of retirees having given a considerable money reward to household previously 5 years in comparison with 22 per cent of working over-50s.

‘When requested about their largest monetary considerations, greater than 1 / 4 of respondents stated they had been most nervous about how their kids and grandchildren are managing financially – rising to a 3rd of retirees.

‘This means that making certain family members usually are not struggling financially is a significant component in why so many over-50s are gifting money to their households. Many are even ready to danger their very own monetary stability to assist out.’

He added: ‘Twelve per cent of those that launched fairness from their houses did so as a way to present monetary help to household, whereas 10 per cent stated that they might reduce on their very own spending in retirement as a way to guarantee they may go away an inheritance.

‘Nonetheless, there’s one other key driver right here too – happiness. They are saying giving is healthier than receiving, and our report would help that. Three quarters of those that have helped their kids or grandchildren purchase a home stated doing so improved their total happiness.’

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