Gifting is continuing to drive expansion in the equity release market with one in four pensioners using property wealth to help family members, new analysis has shown.

Those using property wealth for gifting purposes increased from 22% to 26% in the first quarter of the year with more than 2,700 retired homeowners helping family with a wide range of issues including house deposits, university and school fee, debt repayment, holidays and even starting businesses, figures released by Key Retirement have shown.

The survey showed around 30 retired homeowners a day gave away some or all of the cash they released from their houses in the first three months of the year.
 
The statistics also showed that the total value of property wealth released to the end of March grew by 23% on the previous year to £777m and plan sales increased by 22% to 10,495 - both new record highs for the first quarter.

Homeowners gained an average £74,047 with Londoners making the most, on average, at £128,400.
 
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.”