£940m increase in equity release by homeowners

Research from debt advisory specialists, Henry Dannell, reveals that equity release payments in the UK increased by almost £1bn in 2021, as more and more people look for alternative ways of ensuring healthy and happy retirements.

Between 2020 – 2021, the amount of money released in the UK rose from £3.9bn to £4.8bn, an annual increase of £940m, or 24.4%.

This increase was created by the number of people choosing to release equity rising by 4.3%. At the same time, the average cash value of an equity release increased by more than 19%, from £53,000 in 2020 to £63,000 in 2021.

Director of Henry Dannell, Geoff Garrett, said: “The increased popularity of equity release schemes is down to a number of different factors, but one important one is increasing life expectancy and the fact that people are staying healthy and mobile much later in their lives.

“Sixties are the new fifties, and seventies and the new sixties. As such, people now want more from their retirement years than they used to -they want to travel and pursue hobbies and leisure activities like never before.

“But this youthful energy and aspiration costs money; the sort of money that pensions can’t often provide.

“Furthermore, societal changes mean that children are often less reliant on parental money and inheritance for financial support, so parents are more frequently choosing to enjoy the money that would otherwise be frozen in bricks and mortar investments, determined to enjoy life for as long as possible and their children are increasingly supportive of this choice.”

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