| Equity release lending rose 11% year-on-year to £2.57bn, reflecting a growing demand | Many borrowers use funds for home improvements, gifting family and lifestyle spending | Housing wealth is increasingly integrated into retirement planning to support family needs |
Recently released lending figures1 for last year show equity release lending reached £2.57bn, marking an 11% increase on the £2.3bn recorded the previous year.
Looking more closely at the data, borrowers are turning to equity release for a range of reasons. Around 40% are using it for ‘positive uses’, including home improvements (21%), gifting to family (13%), holidays (6%) and larger purchases such as a car (4%). Meanwhile, more than a quarter (26%) are using equity release to repay an existing mortgage.
Supporting later-life financial planning
Jim Boyd, Chief Executive of the Equity Release Council (ERC), highlighted that this growth underlines the important role “housing wealth is playing in supporting financial resilience and choice in later life.” He noted that the flexibility and security of modern products are making access to housing wealth an increasingly central part of retirement planning, contributing to nearly “£1 in every £90 spent by retired households.”
In the final quarter of last year, the average amount released increased to £123,174, representing a 5.7% rise year-on-year.
Meeting a broader range of needs
No longer viewed simply as a last resort, equity release is now being used to support a wider variety of family needs and retirement goals. From enhancing lifestyle to improving financial resilience and aiding estate planning, its role continues to evolve.
That said, equity release is not suitable for everyone. The right approach will depend on your individual circumstances, objectives and overall financial position. Seeking advice can help you fully understand your options and decide what works best for you and your family.
Equity release and lifetime mortgages will reduce the value of your estate and can affect your eligibility for means tested benefits.
1ERC 2026
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.
