Equity release plugs inheritance gap for millennials to get on housing ladder
19 June 2019
The fact that so many of us are living for so much longer is having a very real impact on what we are able to leave to our children and grandchildren. But it seems that many of today’s youngsters have yet to take the implications on board.
A new survey by investment management firm Charles Stanley1 suggests that some millennials have unrealistic expectations of inheritance – with many of them mistakenly thinking that it will be the key to them getting on the property ladder.
What millennials expect
The survey found that:
- The biggest priority and goal for millennials is to get on the property ladder, with 55% wanting to buy a property
- Only a quarter (28%) believe they will be able to buy a property without inheritance
- Less than a quarter (23%) believe they can pay off their mortgage without an inheritance
- One in seven young adults expect to inherit money before they are 35
- Young people expect to receive nearly £135,000, on average
- 22% of millennials expect to receive inheritance to use as a deposit to buy a house
The reality of inheritance today
- The typical inheritance age is between 55 and 642
- The median average amount inherited is only £11,000
- Only 7% of millennials are likely to inherit money they can use as a deposit to buy a house
How equity release can help millennials
If you have grandchildren who are struggling to get on the housing ladder, equity release could be the solution to enable them to get the step up they need and for you to enjoy the satisfaction of helping them in your lifetime. In fact, 27% of equity release schemes taken out in 2018 were to help friends and family3, up from 24% in 20174.
‘With people living active lives for much longer, the whole nature of inheritance is changing,’ commented Jan Johnson, director of 55+ Equity Release. ‘Many people won’t inherit money until they have long passed many of the big financial milestones which were often eased for previous generations by inheritance, such as getting onto the property ladder or starting a family.’
‘As life expectancy and social structure changes, it’s inevitable that we have to rethink how we manage intergenerational wealth. Equity release schemes have an important role to play within this, and the growth of their use for helping friends and family last year is a trend we expect to continue.’
If you’d like to explore whether equity release is a potential solution to help your grandchildren onto the property ladder, one of our expert advisers would be happy to have an initial conversation with you.
1 Research of 1023 millennials aged 18 – 30 and 1010 parents of children aged 18 and over by Censuswide for Charles Stanley. Research was carried out between 31 Jan 2019 and 6 Feb 2019.
3 Equity Release Market Monitor, Full year 2018
4 Equity Release Market Monitor, Full year 2017