According to the Canada Life’s customer data for the first half of the year, this was the most common reason for releasing some or all of a customer’s equity.
This was followed by 38 per cent of customers using it to pay for home improvements and 20 per cent were leveraging equity release to support day-to-day living costs.
Around 15 per cent of customers used equity release as a gift for their family or friends, whilst 12 per cent booked a holiday or bought a new property respectively and 10 per cent purchased a car.
Alice Watson, head of marketing and insurance at Canada Life, said: “Surging inflation and a rising cost of living is understandably encouraging many people to take stock of their wealth and where it sits. Understanding the reasons why customers seek to release equity from their homes can provide an interesting snapshot into the lifestyles and needs of our customers.”
She continued that the desire to clear an existing mortgage but there was a “significant proportion of people” using equity release to cover their daily living expenses. Watson said this demand was likely driven by the cost-of-living crisis.
“Despite this, customers are also still keen to make home improvements, go on holidays and gift to friends and family. All of this simply highlights the flexibility and accessibility of modern equity release products allowing families the ability to enjoy their retirements comfortably in a way that suits them. However, equity release is a lifelong financial decision, so it is essential that people seek financial advice and talk through their decision with loved ones before agreeing to a product,” Watson noted.
