Canada Life has stated that 50% of equity release applications it received in the first six months of the year were from customers looking to clear their existing mortgage, the most common reason given for releasing some or all of the equity.

This was followed by raising money to pay for home improvements (38%) and supporting day-to-day living costs (20%).

Gifting to family or friends was also a popular reason, with 15% choosing to release equity for this purpose. Customers also continued to use equity release to make substantial one-off purchases such as booking a holiday (14%), buying a new property (12%), or buying a car (10%).

Alice Watson, head of marketing, insurance at Canada Life, said: “Surging inflation and a rising cost of living is understandably encouraging many people to take stock of their wealth and where it sits. Understanding the reasons why customers seek to release equity from their homes can provide an interesting snapshot into the lifestyles and needs of our customers.

“From the first six months of the year we can see that the desire to clear an existing mortgage is a strong driver to pursuing equity release. We then can’t ignore the significant proportion of people turning to equity release in order to cover their daily living expenses, the demand likely being driven by the current cost of living crisis. Despite this, customers are also still keen to make home improvements, go on holidays and gift to friends and family.

“All of this simply highlights the flexibility and accessibility of modern equity release products allowing families the ability to enjoy their retirements comfortably in a way that suits them. However, equity release is a lifelong financial decision, so it is essential that people seek financial advice and talk through their decision with loved ones before agreeing to a product.”