Figures from Canada Life Home Finance reveal that 1 in 5 equity release customers take out loans to bolster their day-to-day retirement finances. The findings underscore the growing use of the loans to fulfill retirement plans, especially as a third of people surveyed in our 2018 Retirement Sentiment Index said they were concerned about 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. This is a 5% growth compared to data gathered in 2017 and 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 most popular reasons for Canada Life Home Finance customers taking out a lifetime mortgage are to make improvements to their home or garden (47.5%) and to clear an existing mortgage (37.9%). Other things the loans are used for include purchasing a new property and helping first time buyers.