Home improvements and debt repayment tied as the top primary reason for releasing funds among new lifetime mortgage customers, according to Pure Retirement.
Half (50%) of those who took out new plans over the last quarter did so for one of those two reasons, split evenly at 25% each.
While the proportion of people using equity release for home improvements stayed constant on both a year-on-year and quarter-on-quarter basis, debt and mortgage repayment saw a 4% quarter-on-quarter increase, and a 3% rise from the 22% seen in Q2 last year.
Holidays, gifting and car purchases rounded out the top five, each representing around 9% to 10% apiece.
Among drawdown customers, home improvements were the primary reason for releasing funds (27%), while debt and mortgage repayment was the second-most popular reason, with 19% representing a 6% reduction compared to the overall figures.
Holidays were third among drawdown customers, with a 14% share representing a 4% uplift compared to overall figures.
Lump sum customers used released funds for more needs-based reasons; debt and mortgage repayment was most popular among this particular customer segment, with a 30% proportion representing a significant increase compared to the overall figures.
Establishing a contingency fund was the fourth-most popular reason among this group, accounting for 8% of all new lump sum customers in Q2.
Paul Carter (pictured), CEO of Pure Retirement, said: “These figures continue to underline the importance of offering a holistic product offering that can cater for both aspirational and needs-based borrowing, with primary borrowing reasons now evenly split between home improvements and debt repayments.
“The divergent borrowing habits of lumpsum and drawdown customers similarly emphasise the different roles these types of products offer, and the varying needs they can cater for.“
