Equity release helps people stay in their forever homes

Home improvements remain most popular reason for equity release

Written in line with our editorial policy.

Home improvements are still the most popular reason for equity release customers to unlock their money, new data shows. According to IFA magazine, more than half (53%) of existing equity release customers are unlocking further funds from their lifetime mortgage in order to improve their property.

The data, gathered by Legal and General equity release, indicates that later life homeowners are unlocking their equity to fund repairs and improvements in order to stay in their forever homes for life. 

Without being able to access the extra money, some retirees may have no choice but to downsize or move to a property that requires less maintenance. This could be devastating for people who have owned their homes for many years, or rely on their neighbours or family living nearby for day-to-day support.

Are home repairs putting a strain on later life finances?

It’s no surprise that older homeowners are turning to their bricks and mortar to raise the cash they need. Home repairs can run into thousands of pounds depending on what needs doing. 

According to an article by Homebuilding and Renovating, UK homeowners had to find an average of £2,864 in 2022 to pay home maintenance bills – an increase of 5.8% on the year before. 

For those living on a pension income, it can be difficult and stressful to come up with thousands of pounds to fund home repairs. This is especially the case for bigger jobs such as roof repairs or replacing old electrical wiring.

Other popular reasons for equity release

Of course, not all home improvements are necessary repairs. Some homeowners do equity release to build a conservatory to enjoy their garden views all year round. You might also want to landscape your garden, perhaps, or replace a weary looking kitchen or bathroom.

Others arrange a plan to make adaptations to future-proof their home. The addition of a wet room, downstairs bedroom or features such as stair lifts and alarm system installations can all make your home safer and more accessible.

Some home improvements can increase the long-term efficiency of a person’s home, too, such as installing insulation or double/triple glazing a property. In addition to being able to live in your home for longer, you may add value to your home and even save money on your energy bills.

There are other popular reasons why people do equity release. Some do it to take more holidays, gift money to family members, buy a new car or to clear their mortgage.

What does equity release involve?

Equity release enables homeowners who are 55+ to unlock some of the tax-free cash from their property’s value, without having to move house or pass strict affordability tests.

Your two main options are a lifetime mortgage and a home reversion plan:

• Lifetime mortgages. Available to over-55s, there are no mandatory monthly repayments to make as the interest can be left to roll up each month. You can minimise the interest by making ad hoc voluntary payments or by arranging an interest-only equity release plan. You will still own 100% of your home.
• Home reversion plans. Over-60s can sell all or some of your home to a reversion company in exchange for a tax-free cash lump sum or regular income. You continue to live in your home as a tenant, paying no rent, for the rest of your life.

Your equity release plan typically comes to an end when you pass away or move into long-term care, at which point your home is put up for sale to settle your plan. Any money left over from the sale of your home is then paid to you or your estate.

To find out how much you could borrow, check here or talk to one of our friendly consultants by calling 0808 178 3055 or request a call back.

Getting equity release advice

Equity release is typically a lifetime commitment, so it’s very important you make the right decision for you. With so many features to choose from, you can tailor your plan to your unique circumstances, but you’ll need specialist advice to do it.

Remember, all the initial advice and information you receive from our selected advisers is given free of charge to help you decide which plan, if any, could work best for you. If you choose to go ahead with a plan then you will 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. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

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