Older homeowners released £1.94bn in equity from their homes in the first half of the year, according to Key, a rise of 32% compared to a year earlier.

In addition, a further £666 million was reserved for future use.

The equity release adviser found that the number of equity release plans taken out rose by 3% in the six months to June 30th to 20,445 compared with a year ago.

The average customer released £94,982 from their homes.

What they spent it on?

Customers are focused on meeting ‘big ticket’ expenses, said Key, such as mortgage and unsecured debt repayment and gifting money to children, rather than holidays or home improvements.

More than half of the proceeds of equity release (52%) were used to clear mortgages (45%) and manage unsecured debts (7%) while 23% was used to help family and friends – notably for help with house deposits as buyers rushed to beat the end of the Stamp Duty holiday.

Will Hale, CEO at Key, said: “The equity release market is benefiting from the success of the vaccination programme putting the country back on the delayed road to recovery with total value released up strongly and the number of plans taken out increasing.

“Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers. This is intergenerational fairness in action and equity release customers provided almost £1 million per day in deposits during the stamp duty holiday.

“Drawdown plans remain dominant and with over 710 different products on the market, those who choose equity release to manage their borrowing benefit from more flexibility than ever – including the opportunity to make ongoing interest and fee free capital repayments. That said, customers need to speak to a specialist adviser who can help them make smart sustainable choices around if, when and how to borrow in retirement.”