The firm looked at sales of equity release products in the 12 months to August 2012 and found that twice as many clients were using such plans to free up money to use as gifts.
Using equity release to fund a divorce settlement was also becoming an increasingly popular option, Bridgewater said.
The top three uses for equity release cash remained to repay a mortgage (32%), pay for home improvements (31%) and to consolidate or pay off other debts (25%). However, the number of customers freeing equity to repay a mortgage was down 12% on the previous year.
Chris Prior, business development manager at Bridgewater Equity Release, commented: “In these days of ‘living wills’ many more individuals are opting to use the equity stored in their homes in order to gift money to children, grandchildren and other loved ones.
“We are in no doubt that the struggles many younger people are having in finding sufficient deposit money to purchase a home is having a major impact on why customers opt for equity release.
“Gifting as an option increased by over 100% in popularity over the previous year as did the ability for plan holders to supplement their income and maintain their lifestyle.
“Again, we believe there is a clear pattern emerging where those reaching, or in, retirement are using their equity in order to boost pension income which may not be anywhere near enough to fund their existing lifestyles.
“That said the three most popular reasons cited remain the same as the previous year which goes to show that equity release appears to be a consistent option for those looking to repay a mortgage, improve their home, or consolidate and pay other debts.”
