The pandemic is disrupting the education, savings and day-to-day finances of many young adults, so it’s no surprise that nearly half of those aged 18-34 say their finances are worse than they were three months ago. Naturally, in the past year, people have become more careful with their money as their interests are shifting and helping out family and friends during these difficult times becomes their main priority. However, the additional outgoings to support the needs of loved ones may be detrimental to their own savings and retirement goals.
It’s striking to see that our LV= Wealth and Wellbeing Monitor* reports 59% of UK adults are not retirement confident and are worried about their future plans, while 32% had to access their savings or pension pot earlier than expected. The report also reveals that 50% of parents with children aged 18+ have spent on average nearly £1,300 over three months supporting family members.
It’s important to make clients approaching or in retirement aware of their options - they don’t necessarily have to compromise on their later life goals to focus on their immediate priorities. Their property wealth can work even harder for them if they choose to explore a lifetime mortgage option. Our lifetime mortgages have been designed with the client in mind, and from our internal data, we know that supporting family and friends is the second most popular reason that people use Lifetime Mortgage Drawdown+. Now, with our newly introduced ERC-free repayment option from day one, our lifetime mortgage products offer even more flexible approach to financial planning.
Support for first deposit/savings
The LV= monitor also revealed that 1 in 5 parents are worried that their 18-30 year old children will struggle to get on the property ladder. Our lifetime mortgage products are designed with great flexibility to offer features that match the needs of clients looking to use our products to support their children and family for a variety of reasons. Older children (aged 30+) were less likely to receive support than those aged 18-30, but those older children that did receive help received a higher amount (as they are likely to need support for bigger commitments such as house deposits and rent).
Georgina Oxton, Divisional Sales Manager, Equity Release
Data source: * LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2020.