- Releasing housing equity for gifting purposes sees 9%1 uplift year-on-year
Canada Life, one of the UK’s leading retirement providers, routinely questions their prospective home finance customers to understand their reasons for obtaining an equity release loan.
Comparing data from H1 2024 to H1 2025, figures show there has been a 9% increase year-on-year in the number of homeowners applying for a loan for the purpose of gifting to family members or friends. In H1 2025, 22% of applications were cited as being used for gifting, whilst the previous year, 13% of applicants picked this reason.
This comes amid steady year-on-year growth within the UK market, as recently evidenced by the Equity Release Council, which reported a 10% increase in total lending from Q2 2024 to Q2 20252 and in the context of forthcoming inheritance tax reforms that are to bring pensions within scope from April 2027 .
Over the same period, Canada Life has also seen a 7% increase in lifetime mortgage applications being cited for day-to-day living costs (from 20% in 2024 to 27% in 2025) and a 12% rise for emergency funds usage (from 9% in 2024, to 21% in 2025) echoing wider inflationary and cost-of-living pressures.
From 2018 to 2024, the primary reason for unlocking property wealth has been to pay off an existing mortgage. While this continues to be a key motivation, it is clear that people are increasingly releasing equity for a wider range of reasons each year.
Top five reasons for loans:
|
Rank |
H1 2025 |
Percentage of total applications for lifetime mortgages
|
H1 2024 |
Percentage of total applications for lifetime mortgages |
|
1 |
Home adaptations or improvements |
43%3 |
Clear existing mortgage |
42% |
|
2 |
Clear existing mortgage |
27% |
Home adaptations or improvements |
34%3 |
|
3 |
Day-to-day living |
27% |
Consolidating debt |
21% |
|
4 |
Holidays |
25% |
Holidays |
21% |
|
5 |
Gifting to family and friends |
22% |
Day-to-day living |
20% |
Sadna Zaman, Home Finance Proposition Development Manager, Canada Life comments on the findings:
“We’re seeing more people turn to equity release not just for one-off expenses or big-ticket projects like home improvements or paying off an existing mortgage, but increasingly as an estate planning tool. With the Government recently confirming its intention to bring unused pension funds into the scope of inheritance tax from April 2027, we anticipate that even more individuals will be turning to equity release as a way to support family members through gifting, while also potentially reducing their future inheritance tax liabilities. It’s clear that many want to see their loved ones enjoy the benefits of their support now.
“Furthermore, increasing numbers of homeowners citing day-to-day-living costs and emergency funds as the reasons for their application signals that the cost of living in retirement is becoming more challenging. With many current and future retirees predicted to lack sufficient pension funds to support them in retirement, our figures underscore the role that property wealth can play as a core pillar of financial planning in later life – whether to cover every day expenses, emergency reserves, or to fund home renovations and experiences that improve quality of life.”
ENDS
Notes to editors:
- In H1 2024, 13% of applications were cited as being used for gifting, and the following year, 22% of applicants picked this reason. The category of ‘gifting’ includes the separate categories of ‘gifting to family’, ‘gifting to help first time buyers’ and ‘gifting to friends.’
- https://www.equityreleasecouncil.com/news/council-publishes-q2-lending-figures-2025/
- Includes two separate reasons: Home adaptations for comfort/safety and Home Improvements (e.g. green/efficient living)
Press enquiries:
Elle McAtamney, Canada Life, 07913 568213, elle.mcatamney@canadalife.co.uk
About Canada Life:
Canada Life is part of a group of companies controlled by Great-West Lifeco Inc., a Canadian headquartered, international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Through its subsidiary companies, Great-West Lifeco operates in Canada, the United States, and Europe. Great-West Lifeco trades on the Toronto Stock Exchange under the ticker symbol GWO and is a member of the Power Corporation group of companies.
Canada Life Limited began operations in the United Kingdom (UK) in 1903 and provides UK individuals and businesses with a range of retirement, investment, insurance and wealth solutions. Canada Life offers individual annuities, pension de-risking solutions, home finance, estate planning and investment options, and workplace protection products.
Canada Life Limited (no.973271) is registered in England and Wales, authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Stonehaven UK Limited (no.05487702), trading as Canada Life, is registered in England and Wales and is authorised and regulated by the Financial Conduct Authority. Canada Life International Limited (no.033178C) and CLI Institutional Limited (no.108017C) are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority. Canada Life International Assurance (Ireland) DAC (no. 440141) and Canada Life International Assurance (Ireland) DAC are authorised and regulated by the Central Bank of Ireland.
Canada Life Asset Management is the brand for investment management activities undertaken by Canada Life Asset Management Limited (no.3846821), Canada Life Limited and Canada Life European Real Estate Limited (no.03846823). Canada Life Asset Management Limited is authorised and regulated by the Financial Conduct Authority.
Please note that while Canada Life Limited and Canada Life Asset Management Limited are regulated as stated above, property management and the provision of commercial mortgages are not regulated activities.