Keeping it in the family? Equity release customers not involving family in decision making
Over a fifth of customers who took out an equity release plan in 2011, did not consult their families beforehand.
With equity release ultimately having an effect on inheritance levels, those considering an equity release plan are advised to involve their families in the decision making process at the earliest opportunity. Family members may be able to assist with alternative arrangements for housing or finance and these options should be discussed as early as possible.
However this recent survey of 2000 equity release customers found 21 per cent did not discuss their plans with their family, an increase of 6 per cent since 2008. These results add further weight to a shift in perception regarding this niche product as Richard Espley, Head of Equity Release at Goldsmith Williams comments:
“Goldsmith Williams always recommends customers involve their families during the initial stages of equity release; not necessarily to get their consent but to keep them in the picture concerning their long term financial arrangements and the implications it could have on the family later on.
“The rise in customers electing not to discuss their proposed equity release with their families could be viewed as a further sign that equity release is moving more towards the mainstream as home owners look to satisfy more general lifestyle requirements, consolidate debt or prop up failing pension provision in retirement. Struggling with rising costs, higher debts and the disappointment of inadequate pension performance weighs heavy on many people and this may have an effect on their willingness to discuss this with their family”.
“As property value makes up the majority of most people’s assets, releasing equity from it will have an impact on inheritance levels. Discussing this with the family at the outset may provide alternatively solutions or at least help to avoid misunderstanding or surprise in the future.”
Content correct at time of publication