Top reasons homeowners use equity release to access andpound;4 trillion housing wealth

The equity release market grew 11 percent in 2025, according to the latest data, as the over 55s rushed to make use of the trillions of pounds tied up in their homes This is what they did with the funds

According to recent research, more homeowners than ever are using equity release to transfer some of the nearly £4 trillion in property wealth that people over 55 own to the following generation.

Without having to sell or relocate, equity release enables senior citizens to access the wealth in their homes through a loan secured by the property's value.

According to full-year data from Canada Life, which offers equity release loans for 2025, there has been a change in the reasons why homeowners are selecting equity release, with a record number doing so for intergenerational gifting as a way to possibly avoid inheritance tax.

Last year almost a fifth (19 percent) of those using equity release did so to gift money to family members. This is the highest number in ten years of Canada Lifes customer data, up 3% from the year before.

As older homeowners seek to assist children and grandchildren with financial milestones like house deposits and school fees, this upward trend highlights the growing importance of intergenerational support.

"More customers are incorporating equity release into their estate planning strategies, using property wealth to pass assets to the next generation in a timely and tax-efficient way," stated Sadna Zaman, home finance proposition manager at Canada Life.

In addition to potentially lowering inheritance tax obligations, this is allowing families to assist loved ones with significant life events like home purchases or schooling. The "

How much money do people over 55 have in UK real estate?

According to data from the Office for National Statistics, property owners in the UK who were 55 years of age or older had a total property wealth of £3.7 trillion between April 2020 and March 2022.

This represents 68 percent of the nations total housing wealth defined as the value of all properties minus mortgage debt.

Equity release is only available to certain homeowners typically aged 55 and over.

With a total value of 1.4 trillion, or 25% of the country's private housing wealth, the 5564 age group has the largest private property wealth. 1.2 trillion (23 percent) belongs to the 6574 age group, while 1.1 trillion (20 percent) belongs to the 75+ age group.

According to Stephen Lowe, group communications director at the retirement company Just Group: "Older people's enormous property wealth allows them to tap into the powerhouse of financial resources stored in their homes to meet a range of needs in later life, from helping family to supplementing their own income in retirement. A "

He added: "The continued freeze on inheritance tax thresholds is likely to tip more estates into paying the tax but using property wealth to make living inheritances could provide homeowners with a means of mitigating the impact of inheritance tax and provide loved ones with extra financial support. The "

Equity release is used by people over 55.

According to Canada Life data, the most common reason for using equity release in 2025 was home improvements or adaptations, with 43% of applicants citing this when applying for a significant 10% increase over the previous year.

Although paying off an existing mortgage continued to be a major incentive, the percentage of people who took out equity release decreased from 36% in 2024 to 27% in 2025.

The data also highlighted a marked increase in the number of people using equity release to establish an emergency savings fund from 8 percent in 2024 to 21 percent in 2025.

The 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.

"The range of uses for equity release underscores the importance of tailored, expert advice," stated Zaman of Canada Life. While equity release might not be the answer for everyone, advisors are essential in assisting clients in making confident, well-informed decisions regarding their long-term financial prospects.

How popular is equity release?

Equity release is increasingly popular. The Equity Release Council's most recent data shows that the equity release market increased by 11% in 2025.

Between 2024 and 2025, total yearly lending rose from 2.3 billion to 2.57 billion. The Councils market data is compiled from actual whole-of-market returns, making it the UKs definitive equity release data.

Lifetime mortgages make up more than 99 percent of the market. These mortgages let people borrow against their homes without making repayments unless they choose to. The loan and interest is paid when the customer dies or goes into long term care.

Despite its growing popularity, equity release has drawbacks. Before arranging your application, a regulated equity release adviser must explain all the risks of equity release.

These include the fact that if you decide not to make any payments on your equity release loan, the cost of borrowing will reduce the amount of equity in your house. If you pay off the equity release loan before the contract's terms, which can be up to 15 years, you will also be subject to costly early repayment fees.