Data from Canada Life revealed that 41 per cent of people used equity release for this purpose in 2023, making it the sixth year running that this has been the main motivation.
Home improvements were the second-most common use, with 28 per cent of people naming this, while 17 per cent used the unlocked funds for day-to-day living costs. This was compared to shares of 32 per cent and 20 per cent in 2022 respectively.
A fifth of people used equity release funds for a holiday, up from a share of 15 per cent in 2022. Canada Life said this brought this back to pre-pandemic levels, when around 21 per cent of people used equity release for this purpose.
Meanwhile, 16 per cent of people used the product to consolidate unsecured debt, equal to the share of use in 2022 and slightly down on 2021’s segment of 18 per cent of people.
Sadna Zaman (pictured), proposition development manager for home finance at Canada Life, said: “Customers are continuing to use equity release for a wide variety of reasons, from home improvements to paying off existing mortgage borrowing. Day-to-day living remains within the top five reasons for releasing equity, with homeowners using the wealth they have built up in their properties to potentially offset increased outgoings thanks to the cost-of-living crisis.”
“The variety of motivations for releasing equity highlights the flexibility and accessibility of the options available, allowing homeowners to enjoy their retirement in a way that best suits them and their families. However, equity release is a lifelong financial decision, so it’s vital that the long-term costs are considered.”
Earlier this week, Canada Life announced that its equity release sales had fallen by £1bn annually to £247m in 2023. This reflected the performance of the wider market, as data from UK Finance showed that later life lending declined by 42 per cent to £4.1bn last year, while figures from the Equity Release Council (ERC) revealed a £4bn drop in lending to £2.6bn.
