Fourteen per cent of Canada Life’s equity release customers used their funds to support the cost of day-to-day living in Q1, over a third (36%) used equity release to clear and existing mortgage and a quarter of customers (25%) used equity release to fund home improvements.

Twelve per cent of applications were also made in order to consolidate unsecured debts, the firm’s customer data has revealed.

Customers also continued to use equity release to make substantial one-off purchases such as booking a holiday (10%), buying a new property (9%), or buying a car (8%).

Alice Watson, head of marketing, insurance at Canada Life, said: “Understanding the reasons why customers seek to release equity from their homes can provide an interesting snapshot into the lifestyles and needs of our customers. Record-breaking inflation and a surging cost of living is understandably leading many people to take an informal audit of their outgoings and where their wealth lies.

“From this quarter’s results we can see that the desire to clear a mortgage continues to be a strong driver to pursuing equity release but we’ve also seen a continuous flow of people turning to equity release in order to cover their daily living expenses or consolidate debts, the demand likely being driven by the current cost of living crisis.

“The variety of reasons given for releasing equity highlight the flexibility and accessibility of modern products allowing families the ability to enjoy their retirements comfortably in a way that suits them. However, equity release is a lifelong financial decision, so it is essential that people seek financial advice and talk through their decision with loved ones before agreeing to a product.”

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