- Nearly half (49%) of customers used equity release to clear an existing mortgage
- Almost a third (32%) released equity to make home improvements, while a fifth (20%) used equity release to fund their day-to-day living
New data1 from Canada Life today reveals the top motivations for customers taking out equity release. For the fifth year in a row, the largest proportion of equity released in 2022 was customers looking to repay their existing mortgage (49%). This was followed by nearly a third (32%) who used equity release to make improvements to their homes.
Amid the cost-of-living crisis, equity release was used by for those looking to improve their financial situation. A fifth of customers released equity to help with day-to-day living costs, while 16% consolidated their unsecured debt.
Despite this, customers continued to use equity release to support their discretionary spending. Last year, 15% released equity to pay for a holiday, while 12% bought a new property, and one in ten (10%) bought a new car.
Alice Watson, Head of Marketing Communications, Canada Life UK commented:
“Customers continue to use equity release in a wide variety of ways, from home improvements to consolidation to paying off existing mortgage borrowing. As the ongoing cost-of-living crisis unfolds, many customers are taking stock of their finances, including the wealth tied up in their homes.
“The variety of motivations for releasing equity highlight the flexibility and accessibility of the options available, allowing homeowners to enjoy their retirements in a way that best suits them and their families. However, equity release is a lifelong financial decision, so it’s vital people seek the help of a financial adviser and discuss their decision with their loved ones before taking out a product.”
Top five reasons for loan2
|
|
2022 |
2021 |
2020 |
|
1. |
Clear existing mortgage - 49% |
Clear existing mortgage - 46% |
Clear existing mortgage - 45% |
|
2. |
Home improvements - 32% |
Home improvements - 34% |
Home improvements - 37% |
|
3. |
Day to day living - 20% |
Day to day living - 19% |
Consolidate unsecured debt - 24% |
|
4. |
Consolidate unsecured debt - 16% |
Consolidate unsecured debt - 18% |
Day to day living - 18% |
|
5. |
Holidays - 15% |
Buy a new property - 15% |
Holidays - 16% |
ENDS
Enquiries:
Press enquiries should be directed to:
Amelia Graham, Vested, 07393 477057, canadalife@fullyvested.com
Elle McAtamney, Canada Life, 07913 568213, Elle.McAtamney@canadalife.co.uk
Notes to editors:
- Canada Life’s Home Finance Reasons for Loans data, 2022
- Customers were able to choose multiple options for their reasons for loans.
About Canada Life:
Canada Life is part of a group of companies controlled by Great-West Lifeco Inc., a diversified financial services holding company headquartered in Winnipeg, Canada. Through its subsidiary companies, Lifeco has operations in Canada, the United States, and Europe. Great-West Lifeco and its insurance subsidiaries have received strong ratings from major rating agencies. Great-West Lifeco has over 30 million customers worldwide and £1.341 trillion assets under administration (as at 31.12.21).
Canada Life Limited began operations in the United Kingdom in 1903 and looks after the retirement, investment and protection needs of individuals and companies alike.
Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales no. 973271. Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Platform Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (UK) Limited, and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 8395855. Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA.
Stonehaven UK Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (U.K.) Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 05487702. Registered office: Canada Life Place, Potters Bar, Hertfordshire, EN6 5BA.