The most popular reasons for choosing equity release during the first half of 2017 are making home improvements and clearing existing mortgages.
New figures from Retirement Advantage reveal a diverse list of reasons for releasing the money, including going on holiday, buying cars and contributing towards daily living expenses.
Based on data from its own customers, Retirement Advantage finds that over one in four (27%) have taken out an equity release loan this year to make home and garden improvements. There are other popular reasons mentioned, including releasing money to clear an existing mortgage. The third most popular reason is consolidating debts, cited by 18% of customers.
Head of Marketing at Retirement Advantage Equity Release, Alice Watson, commented: “As equity release grows rapidly, customers are finding they can use it for a diverse range of reasons. This bodes extremely well for the future, as property wealth establishes itself firmly as part of retirement planning alongside pensions and other assets.
“The popularity of using equity release to clear an existing mortgage is a trend we’ve noticed before among our customers, and speaks of some of the particular features in our product range.”
Retirement Advantage’s data also shows that customers are choosing equity release for many other reasons. Some 14% are using it to contribute to daily living expenses, while 13% of customers in 2017 have released the money to fund a holiday. More reasons include using the money for gifts to family (9%), purchasing a new property (7%) and buying a car (9%).
Watson added: “It’s always fascinating to see the breadth of uses customers have for the funds they unlock from their properties. It is encouraging evidence that retirees are thinking holistically about the role of property wealth alongside other assets to live the lives they want. Especially as evidence suggests that for many, their property will be worth more than their pension.
“As advisers discuss retirement with clients, these figures should serve as a useful reminder that wealth sat in properties can be used to support just about every aspect of their lives as they plan for and enter retirement."