This is according to new research from Key Retirement Solutions’ 2010 Equity Release Market Monitor which shows around £147.5 million of the £922 million released from property wealth went to help out families.
Money went to a variety of uses ranging from helping children to clear debts as well as to buy houses and cars. Some paid for family weddings and holidays while others helped grandchildren pay their way through university.
The analysis shows widows – and, to a lesser extent, widowers – are the most generous to families handing out average cash gifts of £30,100. Married couples pay out an average £20,258 to help out families.
And it is sons who are more likely to be the recipients of handouts than daughters – the average gift paid to sons alone was £21,131 compared with the average payout to daughters of £18,625.
Commenting, Dean Mirfin, group director at Key Retirement Solutions, said: “The Bank of Gran and Grandad is definitely open for business even if the traditional High Street banks are tightening up – and crucially the money is a gift.
“Helping out family is a powerful motivation for retired homeowners and the sums being handed out are major amounts with a total of nearly £150 million given away last year.
“Retired homeowners have around £770 billion of wealth tied up in their houses and many clearly feel financially comfortable enough themselves to be able to help others. It is crucial that families are involved when people take a decision to release equity from their home and if they are receiving the money all the better.”
Key Retirement Solutions’2010 Equity Release Market Monitor showed the total number of new equity release plans sold rose to 23,179 in 2010 compared with 21,305 in 2009 – the first rise since 2007.
Around 59% of customers used some of the money for home improvements in 2010 compared with 56% in 2009 and the numbers using cash to pay off debts fell from 35% to 33%. Around 34% used equity release for holidays last year compared with 33% in 2009. Almost one in four utilising the funds released to help their family remains a consistent priority and motivation, 23% for 2010 compared to 25% in 2009.