OneFamily has stated that equity release is set to grow, driven by rising house prices – though nervousness persists among over-50s as the cost-of-living crisis puts the brakes on discretionary spending.

Research from the financial services company finds that 19% of homeowners over 50 are now looking into taking out equity release, with 46% of this group saying this is in part due to the ever-increasing value of their property.

This is in addition to the 5% of homeowners over 50 who have already taken out equity release in the past year. The average amount accessed over the past 12 months is £46,347 per person, taking into account both new and returning drawdown customers.

The rising cost of living has been affecting over-50s in varying ways in recent months and with many reporting nervousness around spending, a divide has emerged in terms of what equity release money is likely to be put towards.

Most are still planning to go on holidays in the coming year (54%), with equity release cash potentially going towards this expenditure. But while many are looking to make up for lost time after travel restrictions (31%), others intend to postpone trips due to the recent resurgence in Covid numbers (44%). This suggests that some planning to take out equity release for a trip may just be waiting for the right moment to do so.

Overall, 56% say they are currently nervous about spending on luxuries due to the cost-of-living crisis. Driving this, 32% have seen their savings drop over the last 12 months as they cope with increased costs. On average, those who saw their savings decrease saw a shortfall of £6,297. Meanwhile, 8% have run out of savings entirely.

As a result, there are concerns that some people could look to use equity release to help cope with day-to-day costs caused by the cost-of-living crisis. 26% of over-50s say that they are glad that they could fall back on equity release if needed.

Matthew Ellis, head of OneFamily Advice, said: “With rising house values, tens of thousands have turned to equity release to allow them to enjoy more leisure experiences, renovate their homes or to pay off debts that will improve their financial situation in the long-term. In some instances, equity release is enabling people to make adaptions to their property that will allow them to stay in the familiar surroundings of their own home rather than having to downsize to a retirement flat.

“However, equity release isn’t right for every situation, and we would recommend caution in using it as a means to cover shortfalls caused by the cost-of-living crisis. But speaking to a specialist equity release adviser is always an essential first step in understanding whether equity release can help in reducing their money worries and making their lives more comfortable.”