Equity release is becoming increasingly important for homeowners and their retirement finances as new figures show many use it for everyday money matters.
Figures from Canada Life reveal that one in five equity release customers take out loans to bolster their day to day retirement finances. The findings underscore the growing use of the loans to fulfil retirement plans, especially as a third of people surveyed in Canada Life’s 2018 Retirement Sentiment Index said they were concerned about the cost of living and believed they would need over £1,400 a month to cover expenses.
Analysis of the 2018 data shows that 21% of lifetime mortgages taken out by Canada Life customers were partly or solely used for daily living expenses, a 5% growth compared to data gathered in 2017.
The firm points out that this is part of the overall upward trend in the equity release sector. Figures from the Equity Release Council showed a record of 82,000 homeowners taking advantage of equity release in 2018, an increase of 24% since 2017.
“The growth in customers using lifetime mortgages as income during their retirement reflects the extent to which equity release is now viewed as a practical option for retirement planning”, said Alice Watson, head of marketing and communications at Canada Life Home Finance.