Are younger generations more receptive to equity release?

Homeowners aged 45-64 see their home as a ‘nest egg’ for their future

Figures from the Equity Release Council reveal that people aged 45-64 are less likely to view their property as an inheritance for their children. Instead, they see it as a nest egg for their own later life financial planning.

It begs the questions, if younger generations don’t intend to save their property wealth for their heirs, what do they intend to do with all the money tied up in their bricks and mortar?

This article explores the changing attitude and perceptions of property wealth amongst the ‘retirees of tomorrow’ vs. their older counterparts. We’ll be discussing:

• What is equity release?
• Are younger generations more receptive to equity release?
• The changing perceptions of property wealth.
• How to explore equity release further.

For further information and advice on accessing your property wealth, please don’t hesitate to contact our friendly selected equity release advisers.

Simply call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

What is equity release?

If you are a homeowner aged 55+ you may be able to unlock tax-free cash from your home with an equity release plan. 

A lifetime mortgage is the most popular type as you will continue to own 100% of your home with a plan. Exactly how much you can release will depend on factors including your age and property value.

Instead of monthly repayments, the loan and interest are paid back through the sale of the home when you pass away or move into long-term care. However, you can make voluntary payments towards your plan if you wish to, with various options available.

To find out more, please speak to one of our friendly selected advisers: call 0808 178 3055 or request a call back today.

Not yet 55? Whilst you can’t use the product known as equity release until you’re 55, there are other ways to unlock some of your property wealth before then. Read more information here about ways to release equity if you are under 55.

Are younger generations more receptive to equity release?

A report from the Equity Release Council, “Beyond bricks and mortar: the changing role of property in later life financial plans”, reveals that younger generations are more receptive to accessing their property wealth than their older counterparts. 

Figures from the report show that more than half (51%) of homeowners aged 45 and over view their property as a multi-purpose financial tool, rather than a future inheritance for their children. Interestingly, it was the ‘retirees of tomorrow’ – the 45-64 year-olds – who agreed most with the sentiment.

A separate equity release study by Frank Knight Finance between 2020–21 found that more than half of people aged 40- 49 believe equity release is a useful tool for financial planning. This is compared to less than a third of respondents aged 60-69. 

The impact of past exposure to equity release 

The study also found that over half of those aged 40-49 knew somebody that has used equity release, compared to less than 1 in 5 of those aged 60-69. The figures might suggest that the difference in attitude towards equity release could be a result of an increased familiarity and exposure to it.

Another point to consider is the experiences and exposure that older homeowners have had with equity release in the past. For instance, homeowners aged 65+ are more likely to have read about the ‘equity release horror stories’ of the 1980s before strict rules and guarantees were implemented, whilst younger homeowners may be less concerned.

With a record number of customers accessing their money in 2022, could we see further growth in the sector when this younger generation approaches retirement? Only time will tell.

The changing perceptions of property wealth.

Clearly we are seeing a changing attitude to equity release and a shifting perception of how property is to be utilised by later life homeowners. The table below shows some of the key findings from the ‘Beyond Bricks and Mortar’ report by the Equity Release Council.

To summarise, more than half (55%) of homeowners aged 45-64 intend to use their property to support their own financial plans. But less than half (44%) of homeowners aged 65+ felt the same.

And while 70% of later life homeowners see the money they have invested in property as an inheritance for their families, only 60% of their younger counterparts are likely to agree.

The report also found that just less than half (49%) of 45–64 year olds plan to use their home as a nest egg to meet unexpected expenses in the future, compared to 43% of people aged 65+. These expenses might include emergency home repairs or replacing a car after a write-off, for example.

How to explore equity release further

If you are thinking about utilising your property wealth in or approaching retirement then you should speak to a fully qualified equity release specialist. They will help you compare plan features and providers and fully understand which type of plan will work best for you. 

Our selected equity release advisers are ready and waiting to help you explore your equity options and find the best plan for your needs. 

Please call 0808 178 3055 to arrange an appointment, or request a call back for a time that suits you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn