12 February 2024

How to talk with families about equity release

Bank of Family gifting has become an established practice. Our research shows that 60% of recent homeowners received some sort of financial gift to help them get on the property ladder. Across the UK, its estimated that £8.1 billion has been given by family members so far in 2023.

Intergenerational lending like this could boost a buyer’s deposit and help them secure a better interest rate when looking to buy their first property. And beyond the practical benefits to owning their own home, it could contribute to their emotional stability and financial security.

For advisers, however, conversations with clients about financially supporting family members can be a delicate task. There will always be nuances that affect goals, motives and mindsets. And, when it comes to talking about equity release as an option for raising funds, there may be misconceptions that need to be addressed.

Here are six starting points to support your discussions.

  1. Get to know the family dynamics
    Families are complicated, so getting a sense of the dynamics is essential. Start by understanding what you can about the family’s financial situation, expectations and potential concerns. For example, a family with children at different life stages may be worried about ‘fairness’ and making sure they will have the funds to help their family members wen the time is right.
  2. Open up a space for dialogue
    Different generations will have different mindsets when it comes to finances. If your clients are struggling with these conversations, suggest a group call or individual calls with all parties involved. As an adviser, you’re in a position to offer practical advice that takes the emotion out of these conversations.
  3. Help them assess their finances
    It’s crucial that your clients assess their financial situation before providing support, and that they feel confident that any support they offer won’t negatively affect their own stability. You may be able to help them with this, for example, by exploring any tax and estate-planning implications.
  4. Share the knowledge you have
    Offer information about the other ways families can support first-time buyers. From giving money to boost a deposit, to factoring ‘free’ childcare into affordability assessments. Feel free to share our Guide to Gifting with your clients.
  5. Nail their goals and expectations
    Make sure you’re clear on everyone’s goals and expectations. It’s important that everyone is on the same page about how much support is needed and for what purpose. For example, a grandparent may be happy to contribute towards a deposit or solicitors’ fees, but upset when the money is used for refurbishing a kitchen or bathroom.
  6. Don’t forget to follow up

You’ll most likely have covered a lot of ground in these initial conversations. Make sure you share any additional information with your clients before scheduling a follow-up meeting. They may need further discussions with family members or have new questions to ask. Be ready to continue the conversation.

Remember that each family's situation is unique. The key to supporting each person is to create a space for open, respectful and informed conversations. Thanks to you, your clients can get the advice they need to make the decisions that are right for them.


Want to know more about Bank of Family trends?

Take a look at our recent findings from our Bank of Family report.

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