Pensioners are cashing in on rising property prices to withdraw increasing amounts of equity from their homes, analysis from financial provider Key Retirement shows.
The report from Key looks at many of the underlying trends of equity release. It found the UK’s house price boom is making an increasing contribution to improving standards of living in retirement, with 59 per cent of customers using some or all of the cash to fund home or garden improvements and 29 per cent spending money on holidays.
But equity release is also playing an increasingly important role in clearing debt, with 33 per cent paying off credit cards and loans compared with 30 per cent a year ago, and 28 per cent paying off mortgages, up from 23 per cent last year.
Total equity released between July and September soared to £394.8 million compared to £299.8 million in the same three months last year. The average customer released £67,500 compared with £57,286 in the same period last year, with those releasing cash owned a house worth an average £264,600 compared with £248,200 last year.
Dean Mirfin, group director at Key Retirement, comments: “The strength of the housing market is giving retired homeowners increased confidence in using the wealth they have built up in their home to fund their retirement.
“For millions of retired homeowners their biggest and most successful investment is their home and it makes sense to release money now to improve their standard of living. The evidence shows the money is being used sensibly and invested in home improvements, clearing outstanding debts and helping families.”
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