New data has revealed that 79% of grandparents have helped their grandchildren financially and 8% turn to property wealth to fund this support.
A survey by Legal & General Home Finance (LGHF) of 2,000 grandparents in the UK found that younger grandparents (aged 50-64) are twice as likely to use property wealth to gift to grandchildren (10%). Which was compared to 65-74 year olds (5%).
This indicates the next generation of grandparents are becoming more likely to consider the value of their homes as part of their financial planning.
This follows Legal & General’s previous Equity Economy report which found that whilst one in 20 homeowners currently used equity release to fund retirement, it is anticipated to almost double to one in 10 (11%) based on the anticipated plans of younger homeowners.
Craig Brown, CEO, Legal & General Home Finance, said:
“While grandparents have a wealth of life experience to pass on, they are also choosing to provide financial support to younger generations. With house prices remaining high, many homeowners will look to the value tied up in their property as a way to pass on a living inheritance to their grandchildren. This might be in the form of a large gift, such as a contribution to a deposit on a first home, or as regular financial support to meet rising living costs.
For some, a lifetime mortgage will provide a practical solution to accessing the wealth found in their home but we also know that, where financial support isn’t possible, extended family are often providing help in other ways, such as unpaid childcare or allowing adult children to move in to help them save for a home of their own.”
Regionally, grandparents in London are most likely to use property wealth to gift to grandchildren (15%), possibly due to the region’s higher than average property values, alongside the significant increase in equity they will have seen over time.