"Gifting is a major motivation for equity release and our data shows it is more a case of parents and grandparents wanting to gift rather than children asking for help."
Gifting is continuing to drive expansion in the equity release market with a quarter of pensioners now using property wealth to help family, according to Key Retirement data.
The numbers using property wealth for gifting increased to 26% from 22% in the first quarter with over 2,700 retired homeowners giving away some or all of the cash they released.
The total value of property wealth released in Q1 grew by 23% on the previous year to £777 million and plan sales increased by 22% to 10,495 – both new record highs for the first quarter.
Retired homeowners made an average £74,000 from their homes, with home and garden improvements, as well as holidays, topping the list of uses.
However debt remains a major issue in retirement with 21% paying off existing mortgages including interest-only capital repayments and 30% clearing credit cards and loans.
Dean Mirfin, chief product officer at Key Retirement, said: “Gifting is a major motivation for equity release and our data shows it is more a case of parents and grandparents wanting to gift rather than children asking for help.
“They’re motivated by the desire to help when the money is really needed and being around to see the difference that it makes. In addition, equity release enables them to have some control over how the money is ultimately used.
“They are being helped in this by a very competitive market place with rates fixed for life at their lowest ever levels as increased competition and new lenders means rates on plans are lower than many mainstream lenders’ variable rates.”