The COVID-19 crisis could see an increase in equity released by the so-called ‘sandwich generation’ to facilitate intergenerational financial support.
Some 20% of those considering equity release said that the pandemic’s impact on their broader family’s finances has meant that they’re more likely to take out the product.
This is according to research from OneFamily, which also found that over-55s are already giving financial handouts to younger family members.
69% of over 55s said they have helped their adult family financially in the past in some way, most commonly just to make ends meet (30%), while 23% took out money to help family pay off debts.
The Sandwich Generation is a sector that’s growing in number, an Office for National Statistics report in 20193 suggested that as many as 3% of the UK’s general population – 1.3 million people – are emotionally and financially supporting both their parents and their stay at home children.
Worryingly, it also stated that 27% are showing symptoms of mental ill-health as a result of trying to juggle both sets of responsibilities.
Paul Bridgwater, OneFamily’s head of lending Proposition said: “This is not a problem that’s going to go away on its own. The Sandwich Generation are caught in the middle, caring for a generation either side of them whilst some of them are also trying to juggle their own work alongside their busy lives.
“Equity Release has come under some focus recently, but here is an example of how a not insubstantial group of people could benefit from being given good advice that would help to relieve the pressure on their lives.
“With the right product they could free up wealth in their own property to find that deposit for their children’s first home and help them with some much-needed financial support. Equally, equity release could be a solution to enable greater care support to their parents and give the Sandwich Generation a much-needed break.
“Equity release isn’t right for everyone, but clearly there are some important social needs that could be met with careful, focused wealth planning.”