"We’ve seen the percentage of people using equity release to pay off an existing mortgage rise over the course of 2019 and with property values on the up, it’s a trend we expect to continue."
The data shows a rise of 14 percentage points on the percentage of people using equity release to clear existing mortgages compared to Q3 2018.
The second most popular reason for using equity release in Q3 was for home improvements (41%). Holidays were also a popular reason, selected by just over a fifth of equity release consumers (21%), alongside buying a new car (13%) and gifting to family (12%).
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “These figures show the continued appeal of lifetime mortgages to help with financial planning in retirement. We’ve seen the percentage of people using equity release to pay off an existing mortgage rise over the course of 2019 and with property values on the up, it’s a trend we expect to continue. But it’s not just for financial security. Many people are also using the products to fund home improvements and holidays and overall improve their lifestyles.
“With rising house prices and costs of living, it’s no surprise that some homeowners are wanting to share some of the wealth in their property with family members. Using equity release allows people to gift to their family, whilst still living in their property. In addition, it is also a useful tool for improving the efficiency of estate planning.
“As people continue to look for ways to improve their retirement lifestyle, and support members of their family through intergenerational wealth transfers, it’s important that advisers are aware of the different motivations involved in people’s financial plans. Equity release products can offer flexibility and security, freeing up some of the cash in their property to give themselves, or others, a financial and lifestyle boost.”
