According to Pure Retirement’s latest Q3 analysis, retirees are increasingly accessing lifetime mortgage funds for essential living expenses. While home improvements still lead as the main reason for borrowing, a notable shift towards more necessity-driven use of funds has been observed.
In cash release cases, 40% of retirees used funds for home improvements, marginally down from 41% in the previous year. Holiday-related borrowing has seen a decrease to 13%, a drop from 16% last year. The use of funds for car purchases has remained steady at 9%. Significantly, 9% of retirees used drawdown facilities for day-to-day living expenses, marking an increase in necessity-based borrowing. Gifting accounts for 6% of drawdowns, showing consistency in its usage.
For further advances, the trend is similar. Home improvements accounted for 27% of additional borrowing, showing a slight decrease from last year’s 30%. The use of extra equity for emergency funds has risen to 13%, up from 15% last year. Holiday-related borrowing stayed around 12%, while gifting has seen a slight decline. Borrowing for car purchases, although less frequent, has maintained a stable presence.
Scott Burman, head of distribution at Pure Retirement, said: “Given the recent economic landscape, it’s unsurprising to see more needs-based borrowing among retirees accessing cash releases or requesting additional funds.
“However, the mixed picture alongside more aspirational means points to the diverse customer profile in the market.
“This emphasises the need for products that cater to a broad range of retiree needs, and we’re committed to continuing our focus on holistic product development to support retirees’ financial requirements.”
