The free thinking of baby-boomers, while having led some to save too little, is contributing to rising sales in equity release
The importance of passing on wealth or assets to relatives seems to be waning with every passing year. Why is this? The reasons are surely intertwined with the minefield of inheritance tax and the fact the sheer length of most people’s retired life – thanks to the ageing of society – means there is less to pass on.
However, I believe there is another reason why the importance of leaving an inheritance is declining: it is directly linked with the resurgence of the equity release market. Pensioners in 2017 are more liberal than their predecessors with their cash.
Today’s average retiree grew up in the Swinging ’60s – the time of free love and open-mindedness. This liberalism spread to their wallets and throughout their lives they have spent more and saved less than previous generations.
Leaving money for the kids has never been the number one priority for baby-boomers. Indeed, 93 per cent of our advisers report that inheritance is becoming a less important consideration for clients.
Ultimately, the financial liberalism of the baby-boomers has led some into a situation where they have not saved enough for their retirement – which is, of course, far from ideal. That said, the same progressive mindset has led some of this generation to consider things such as equity release as a possible retirement finance option.
There are still battles to be fought and we need to convince a huge number of people that accessing property wealth through products such as the lifetime mortgage can be helpful in certain situations. But the free-thinking approach of the baby-boomers is certainly contributing to the rising sales within the market.
Andrea Rozario is chief operating office at Bower Retirement