How customer motivations shaped the equity release market in 2025

The landscape of equity release is evolving, with customer motivations reflecting both personal aspirations and wider economic shifts. Analysing data from 2024 and 2025 reveals not only what drives homeowners to unlock property wealth, but also how these reasons are changing year-on-year.

In both 2024 and 2025, home improvements emerged as a leading reason for equity release. In 2024, just 32% of customers cited this motivation, but by 2025, this figure had soared to over 40%. This substantial increase suggests a growing desire among homeowners to invest in their properties, whether to enhance comfort, adapt homes for later life or simply add value.

The proportion of customers releasing equity to clear an existing mortgage dropped from 36% in 2024 to 27% in 2025. This decline could indicate that fewer retirees are burdened by mortgage debt, or that previous equity release activity has already addressed this need for many.

The percentage of customers using equity release for day-to-day living expenses increased from 22% to 27%, reflecting the ongoing impact of inflation and the cost-of-living crisis, with more retirees seeking to supplement their income and maintain their standard of living. Even more striking is the surge in those establishing an emergency fund - from 13% to 21%. This dramatic rise points to heightened financial caution, with more customers prioritising a safety net against unexpected expenses, possibly in response to economic uncertainty or personal health concerns.

Gifting to family also became more common, increasing from 16% to 19%. This trend highlights the growing importance of intergenerational support, as older homeowners use equity release to help children and grandchildren with house deposits, education costs or other financial challenges. Meanwhile, consolidating unsecured debts remained a steady motivation, accounting for around 21% of reasons in both 2024 and 2025, underscoring the persistent challenge of managing personal debt in retirement.

While reasons such as buying a new car, business investment and buying a holiday home remained relatively minor, suggesting that most customers are focused on immediate financial needs and family support.

Sadna Zaman, Proposition Development Manager at Canada Life, said:  “The latest data shows that equity release is increasingly being used for home improvements, financial resilience and supporting family. Clients are prioritising comfort and adaptability in their homes, while also seeking ways to manage rising living costs and help loved ones with major milestones. These trends highlight the importance of tailored advice - equity release is now a flexible solution for a wide range of retirement ambitions, not just debt repayment. Advisers have a key role in helping clients make informed, confident decisions for their future."

What does this mean for advisers and providers?

The comparison between 2024 and 2025 highlights a clear shift in customer priorities. Equity release is increasingly seen as a flexible tool for lifestyle enhancement and financial resilience, rather than solely for debt repayment. The rise in home improvements and emergency funds suggests that customers are seeking both comfort and security in retirement, while the increase in gifting reflects changing family dynamics and the desire to support loved ones.

For advisers and providers, these trends underscore the importance of understanding the diverse motivations behind equity release. Tailoring advice to address both immediate financial needs and longer-term aspirations will be key to supporting customers as they navigate their retirement journey.

Top reasons for loan 

Sources

1. Canada Life, 2026. Reasons for loan given for initial advance applications. Customers were able to choose multiple options for their reasons for loan.
2. Includes two separate reasons: Home adaptations for comfort/safety and Home Improvements (e.g. green/efficient living)

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