A recent study conducted by SunLife has shown that home improvements, debt repayment, and travel are the top three areas where equity release funds are being spent.
The research, named “Life Well Spent,” surveyed 2,000 individuals over the age of 50 and discovered a discrepancy between what over-50s thought they would spend equity release money on and what they actually spent it on.
According to the study, approximately 5% of those eligible for equity release have taken advantage of it, while 15% would consider it.
On average, survey respondents released £50,514 in equity. The top priorities for those who have not yet taken out equity release but would consider it include holidays (53%), home improvements (47%), and early retirement (27%).
However, the actual spending priorities of those who have released equity differ. The top priority is home improvements (39%), with an average spend of £11,100, followed by mortgage and debt repayment (33%), with an average spend of £18,441.
Holidays or travel ranked third (31%), with an average spend of £6,500. Notably, only 13% of respondents used the funds for early retirement, despite 27% believing they would do so.
The research also revealed that one in eight over-50s who have released equity from their homes did so to financially support their loved ones, with a further one in ten considering it.
SunLife’s study found that 12% of over-50s who have released equity provided financial support to family members, giving an average of £12,525, while 13% released equity to give cash gifts to family members, averaging £4,043.
Of the respondents who have released equity, 75% said that it improved their overall happiness, including more than half who reported that releasing equity significantly improved their happiness.
SunLife CEO Mark Screeton commented on the findings, said: “It’s great to see that the vast majority of those who have released equity feel happier in their lives as a result.
“Retirement should be a time to relax and spend your time however you choose, and for some people, equity release can be a great way to unlock more opportunities in later life.”
