The survey shows the economy is causing more people to consider using equity release specifically to help family members deal with their own financial pressures.
The survey of 1,142 UK adults found 61% of parents and grandparents say they would consider equity release to help out their children or grandchildren financially.
The most common situations that people would assist family members with are all costs which have developed as a result of the ongoing financial situation: helping them with housing deposits (53%), helping with mortgage repayments or rent (36%) and helping with university fees (31%), costs that have all risen significantly for young people in recent years.
The research found that 70% of parents and grandparents would be comfortable releasing more than £10,000 from their property to help out a family member. Twenty-four per cent of people would consider releasing equity of between £10,001 and £20,000, and 19% would release between £20,001 and £30,000. Four per cent said they would release more than £100,000 to help out family members.
The survey also found support for the new 100% LTV mortgage products launched recently, with 60% saying they would be prepared to act as guarantors and use a charge on their own property to assist a family member to get onto the property ladder.
However, 68% said they would be prepared to gift a deposit to their children or grandchildren, and just 19% said they wouldn’t want to use equity release to provide a deposit for their children or grandchildren, suggesting people are more comfortable providing a one-time gift than acting as a guarantor over a period of time.
While parents and grandparents are considering equity release to help younger family members financially, younger people in turn are also considering recommending equity release to their parents to help them in retirement.
The majority of people (59%) would now consider recommending equity release to their parents so they could enjoy a better standard of living when they are older. A third of people said they would definitely recommend it and just 2% of people said that the amount of inheritance they would receive was a factor in whether or not they would recommend it, a clear signal that attitudes to inheritance have changed significantly, which is a positive development for the equity release industry.
Commenting, Claire Barker, chairman of ERSA said: “Traditionally, equity release is taken out to enhance people’s retirement. But according to our research, people are increasingly looking to release equity in their homes to help their families too.
“Financially, it is a very difficult time for young people with housing deposits rising, rent payments increasing and tuition fees set to triple next year. Unfortunately this situation is not going change for many years, and while many parents and grandparents want to help out most of their wealth is tied up in their property.
“For people wanting to help out their loved ones, equity release can provide a valuable way to assist younger family members at a time when they really need it.
“In this situation taking professional advice from a broker and also a qualified solicitor is of paramount importance as people need to understand all the legal implications and consequences of equity release.
“The fact that the majority of both older and younger people now see the value of equity release both to help out loved ones and to help maintain a good standard of living in retirement present a clear opportunity for advisers and providers alike.”