Over 50s use equity to fund home improvements
Over 10% more people are using equity release to make home improvements than in 2012, and they are spending an extra 30%, according to research from Saga Equity Release Advice Service.
It suggested that this increase could be fuelled by a desire for people to stay in their own home for as long as possible, motivating them to ‘future-proof’ their property.
Home improvement has been the main driver for people taking equity release plans for the last five years, said Saga. Two thirds of people now spend some of the money released from their home on their home, typically spending over £13,000.
Older generations have also increased the amount of housing wealth they pass on to their family, which is often used for housing deposits or education for their grandchildren.
The amount people have gifted to family has increased by over a quarter since 2012 and now typically stands at £33,000.
Equity release sales have surged by 30% over the last year, as older people become increasingly comfortable with using the equity they have built up in their homes to improve their lifestyle and help their families.
Gloria Barker, head of products at Saga, said: “Equity release is increasingly being considered as a mainstream solution by older homeowners for future proofing their homes and income for later life – making them less dependent on the state. That’s a big change from the traditional perception that it is limited to those who find it hard to make ends meet.
“While people are beginning to see their house as an asset to fund later life rather than something for their family to inherit, this does not mean that they are not prepared to help family out financially. By far one the biggest chunks of money they withdraw is to gift to their relatives, showing that they are keen to pass their wealth on down the generations.”