Mortgage Solutions have published findings from Legal & General, detailing that equity release is becoming more commonly used to fund holidays since the ending of pandemic restrictions. In fact it has almost tripled.
Equity release drawdowns to fund trips away surged at the start of 2022 from the same period in 2021, according to data from Legal and General Home Finance.
One in five equity release customers used cash for travel at the start of 2022, compared to only 7% in 2021.
Borrowers using money to buy a car also jumped by two thirds year on year, which shows a return to aspirational spending, L&G said.
Health is also front of mind for customers as drawdowns for health and medical purposes doubled. The cost of care is a big consideration for our customers at Viva Retirement Solutions, and this case study is a good illustration.
However, the cost of living crisis could impact spending habits among those taking equity release in the coming months, L&G said.
Craig Brown, chief executive of L&G Home Finance, said: “As pressures, such as the pandemic, may have affected finances, the home is a valuable asset which can play a key part in supporting retirement, whether that is aspirational spending or helping younger family members who may have faced financial difficulties."
“The rest of 2022 is set to bring a new range of challenges, as cost-of-living concerns hit households across the country, and we anticipate that people might seek out lifetime mortgages for different reasons in light of such pressures, for example for gifting purposes to relatives or to boost their retirement income. The data shows that even as the cost of living crisis looms, customers have been using lifetime mortgages for aspirational spending. Legal & General emphasise the importance for people to look ahead and to plan and budget for their needs, goals and later life priorities.”
If you would like to explore how to best release equity from home whether to fund a holiday or help the family out or a myriad of other reasons, please get in touch today.