One In Five New Lifetime Mortgage Customers Releasing Funds for Cars and Holidays – Pure Retirement

18 April 2024

Analysis of Q1 data from lifetime mortgage lender Pure Retirement points to 20% of new equity release customers listing either holidays (11%) or cars (9%) as the primary reason for borrowing, highlighting the diverse range of purposes and circumstances currently being served by modern later life lending.

These levels are the highest the lender has seen on both a year-on-year and quarter-on-quarter basis, with holidays now the third most popular reason behind home improvements (25%) and paying off debts and mortgages (21% - the lowest it’s been on both a yearly and quarterly basis). The lender’s analysis also points to stability, with the top five reasons remaining unchanged over the last twelve months, with gifting rounding out the most common reasons in fourth place.

Among lumpsum applicants in isolation, paying off debts/mortgages has remained the most common reason, sitting at 26% (albeit the lowest it’s been on both a yearly and quarterly basis, peaking at 29% in Q4 2023). Home improvements as remained the second-most popular reason, while gifting (third-most popular, 11%), and contingency fund (fifth-most popular, 8%) point to more needs-based borrowing among this audience – either for themselves or to help out their family.

Drawdown customers, meanwhile, favour more aspirational and lifestyle-oriented uses, with only 16% of applicants primarily using released funds for repaying debts and mortgages – 10% less than lumpsum customers and only marginally above the 14% taking out a lifetime mortgage primarily for holidays. In the same way that lumpsum customers listed contingency funds as their fifth-most popular reason, among drawdown customers it’s lifestyle improvements, accounting for 8% of cases by volume.

Speaking of these latest findings, Pure Retirement CEO Paul Carter says: “These latest figures highlight the way that lifetime mortgages continue to cater for a diverse range of needs and audiences, and also underlines the importance of offering both lumpsum and drawdown options, given they’re effective solutions for people for very different reasons. We don’t underestimate the importance of monitoring and understanding key customer trends, and look forward to continuing to use these sorts of findings to shape our product offering going forward.”