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Thousands of homeowners aged 55 and over release equity from their homes every year to give their finances a boost.
Equity release is a way of freeing up some of the wealth tied up in your home, without having to sell it. The interest you owe is only repaid, along with the initial amount of money you’ve released, when you die or go into long term care.
Although for some it can be a useful way to raise cash, equity release has its drawbacks and can have a significant long term financial impact on your wealth – it is certainly not suitable for everyone. You can find out more about some of the risks of equity release in our guide Equity release – what are the risks?
While one person’s motivation for turning to equity release may be different from others, there are some key reasons that prompt most people to unlock some of their property wealth.
So, if you’ve been thinking about equity release, here are some of the most popular reasons people decide to do it.
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Are you considering releasing equity from your home? Speaking to an experienced adviser can help you to understand your options.
If you think you’d benefit from expert advice, you can book a free consultation with an adviser at HUB Financial Solutions. A qualified, FCA-regulated equity release adviser you can trust will listen to your needs and talk you through your options. HUB Financial Solutions is rated ‘Excellent’ on Trustpilot.
Please note that equity release will reduce the value of your estate. So if it’s not right for you, the adviser will help you understand some alternatives.
1. To clear an existing mortgage or consolidate debts
One of the most popular reasons for people choosing equity release is to clear an existing mortgage or consolidate debts.
This may be due to the fact that interest rates have increased in recent years, and even though they are now gradually starting to ease, many homeowners are facing a steep jump in mortgage payments when their existing deals come to an end. Learn more about this in our article Are you facing a mortgage timebomb?
These steeper costs might be difficult to cover, especially in retirement when many people’s incomes fall, so homeowners often turn to equity release to help them pay off their mortgages.
This may enable them to enter their retirement years mortgage-free, so they don’t have to spend any of their income making monthly debt repayments.
2. To fund home improvements
Many of us want to stay in our family homes for as long as possible, and releasing equity for home improvements might mean you can alter your property for your future needs, or simply create the home you’ve always dreamed of.
Soaring house prices in many areas of the country, combined with steep moving costs, mean that for many people, improving their property is a cheaper option than moving.
According to Canada Life, making home adaptations or improvements was the most popular reason for using equity release in 2025, with 43% of applicants citing this when applying, a significant 10% increase compared to the previous year.
If you’re weighing up the pros and cons of using equity release to fund renovations, have a look at our article How to pay for home improvements to see some other options you might want to consider, or if you’re not sure whether to stay put or move, our article Should I move or improve? might help.
3. To cover day-to-day living costs
Steep household bills mean that growing numbers of people are turning to equity release to help them cover their day-to-day living costs.
Even when inflation is low, using the equity released from your home to boost your income is a popular choice, especially for those who find themselves asset-rich but cash-poor when they reach retirement.
More than 1.2 million retired households in the UK are economically inactive and largely dependent on the State Pension for their retirement income, according to analysis of ONS data from retirement specialist Just Group.
Pensions UK’s Retirement Living Standards suggest a single pensioner needs a yearly income of around £13,400 to achieve a ‘minimum’ standard of living, leaving a £1,427 shortfall once the £11,973 provided by the current State Pension is taken into account.
Those who don’t have other savings or pensions to supplement their State Pension may therefore consider releasing equity to help plug this gap.
4. To give money to family or friends
It has become increasingly popular to release equity to give as a ‘living inheritance’ to family or friends. This money is often given to help recipients achieve a specific financial goal, for example, to fund higher education, or to help them get onto the property ladder.
According to Canada Life, in 2025, 19% of those using equity release did so to give money to family members, a 3% increase on the previous year, and the highest figure recorded in a decade of the insurer’s customer data.
Sadna Zaman, Home Finance Proposition Manager, Canada Life, said: “More customers are incorporating equity release into their estate planning strategies, using property wealth to pass assets to the next generation in a timely and tax-efficient way. This is enabling families to support loved ones with major milestones, such as home purchases or education, while also potentially reducing inheritance tax liabilities.”
Of course, this isn’t an option everyone will feel comfortable with, and you should only consider it if you’re financially stable yourself. If you’re considering taking this route, you can read more in our article Can I take money out of my property to give to my children?
5. To fund holidays and other purchases
Often, people who apply for equity release plan to use some of the money to book a holiday or go travelling.
Bear in mind that releasing equity to pay for a holiday could end up costing you much more in the long run, so it shouldn’t be entered into lightly. For many people, releasing equity means they can finally achieve the dream or aspiration they’ve worked towards, but it’s certainly not without its downsides. You can learn more about how equity release works and the pros and cons involved in our guide Equity release – what is it and how does it work?
Finally…
Whatever your reasons for considering equity release, it’s important to remember that you are effectively taking money out of your home. This could not only affect any means-tested benefits you might have been entitled to, but will also impact the value of any inheritance you may have planned to leave. While you can continue to live in your home after releasing equity from it, you’ll need to check the small print to ensure that you are comfortable with the rights that any equity release firm will have over your property.
If you’re considering equity release, your first step should be to seek advice from a qualified financial advisor.
You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guide on How to find the right financial advisor for you.
They can help you understand the best option for you and recommend a suitable product from a member of the Equity Release Council (ERC). The council has a number of product standards which help safeguard borrowers so it is important that any provider you choose is a member. Advisors can also be members of the ERC. You can search for an equity release provider that belongs to the ERC here.
Advertisement
Are you considering releasing equity from your home? Speaking to an experienced adviser can help you to understand your options.
If you think you’d benefit from expert advice, you can book a free consultation with an adviser at HUB Financial Solutions. A qualified, FCA-regulated equity release adviser you can trust will listen to your needs and talk you through your options. HUB Financial Solutions is rated ‘Excellent’ on Trustpilot.
Please note that equity release will reduce the value of your estate. So if it’s not right for you, the adviser will help you understand some alternatives.
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