50% of Q2 New Equity Release Plans Taken Out for Home Improvements or Debt Repayment – Pure Retirement

02 July 2024

Among new customers home improvements and debt repayment are tied as the top primary reason for releasing funds among new lifetime mortgage customers, according to analysis by later life lender Pure Retirement.

The findings show that 50% of those who took out new plans over the last quarter did so for one of those two reasons, split evenly at 25% each. While the proportion of people using equity release for home improvements has stayed constant on both a year-on-year and quarter-on-quarter basis, debt and mortgage repayment has seen a 4% quarter-on-quarter increase, and a 3% rise from the 22% seen in Q2 last year.

Holidays, gifting and car purchases continue to round out the top five most popular reasons, with each representing around 9-10% apiece.

Among drawdown customers in isolation, home improvements continue to be the primary reason for releasing funds, sitting at 27% - while debt and mortgage repayment continues to remain the second-most popular reason, its 19% proportion represents a 6% reduction compared to the overall figures. Holidays remain the third-most popular use of funds among drawdown customers, with a 14% share representing a 4% uplift compared to overall figures.

Lumpsum customers continue to use released funds for more needs-based reasons; debt and mortgage repayment is the most popular use among this particular customer segment and a 30% proportion representing a significant increase compared to overall figures. Establishing a contingency fund is also the fourth-most popular reason among this group, accounting for 8% of all new lumpsum customers in Q2.

Speaking of the findings, Pure Retirement’s CEO Paul Carter says: “These figures continue to underline the importance of offering a holistic product offering that can cater for both aspirational and needs-based borrowing, with primary borrowing reasons now evenly split between home improvements and debt repayments. The divergent borrowing habits of lumpsum and drawdown customers similarly emphasise the different roles these types of products offer, and the varying needs they can cater for. “