1-in-10 lifetime mortgage cash releases are for day-to-day living

Cost of living now a significant driver for later life lending

New data from lifetime mortgage lender Pure Retirement reveals that borrowers are turning to their property wealth to top up their day-to-day living costs.

The research from Pure Retirement looks at how equity release customers spend the tax-free cash they release. It shows that almost one-in-ten people accessing their property through equity release are doing so to pay for their day-to-day living expenses. This might include groceries, paying for household bills, transport costs and more.

The data is notable as this reason didn’t register in the top five reasons for equity release a  year ago. It indicates that soaring inflation and the cost of living in recent years has led to some people accessing their property wealth to meet basic living costs. 

Pure Retirement’s head of distribution Scott Burman spoke of the findings. He said: “Given the recent economic landscape, it’s perhaps unsurprising to see more needs-based borrowing taking place among those accessing cash releases or requesting additional funds.”

Top five reasons for drawdown cash releases revealed

Home improvements, always a popular reason for equity release, remain the number one motivation for cash releases from drawdown lifetime mortgages. The data shows that 40% of Pure Retirement’s drawdown activity is for this purpose. Home improvements could cover anything from installing a new bathroom or kitchen to covering essential home repairs such as a new boiler installation or roof repairs.

Holidays remain the second most popular reason with 13% citing them as a reason, though this is down 3% on last year. Car purchases in retirement are in the third spot at 9%, with help for day-to-day living costs coming in fourth.

Finally, gifting takes the fifth spot with 6% of customers accessing their drawdown facility to gift a ‘living inheritance’ to their family members. With many people needing a bit more financial support at the moment, equity release enables older homeowners to pass their wealth down to their younger generations when they need it most.

Thinking about accessing some of your property wealth to top up your day-to-day finances, take more holidays, or make home improvements? Use our free online equity release calculator to see how much you could potentially release.

Getting equity release advice

Equity release is one of the biggest financial decisions you can make, so it’s very important you do your research and think carefully about securing other debts against your home. 

To help you make a confident decision, we can arrange for you to talk to one of our selected advisers who can compare quotes on your behalf and give you all the initial advice and information you need. Better still, this initial advice is given to you free of charge. 

Only if you choose to go ahead with a plan will you receive a fee for advice, which can be paid from the money you release from your home. 

Call our friendly team today on 0808 178 3055. Or request a free callback here for a time that is convenient for you.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn