Many Brits are carrying debt into their mid-life years and are increasingly considering equity release as a way to deal with being asset rich and cash poor, according to latest research.
Nearly half (45%) of those aged over 50 are still managing debt, SunLife’s Life Well Spent 2025 report found, with the financial pressure being felt most in London and the South East.
The amount overall they have left to pay off averages £23,799 – rising to an average of £33,590 for homeowners over 50.
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The 2025 SunLife report finds those who released equity unlocked an average of £69,982, with 36% using the funds to pay off debts and 44% to improve their homes. Three-quarters (76%) said these moves to boost their finances made them happier.
Mark Screeon, chief executive at SunLife, said: “Many over 50s have worked hard for decades yet still find themselves with some debt. The rising cost of living and ongoing financial commitments can make it hard to enjoy the retirement they’ve planned.
“For some homeowners, equity release could offer a practical and empowering way to unlock some of the money tied up in their property to pay off debts, support family or simply live more comfortably.”
How much debt do over 50s have?
Mortgage debt remains the biggest burden. Higher interest rates leading to increased mortgage rates mean many find themselves paying off their homes well into retirement.
Over 50s have an average balance of £67,538 left on their mortgage and monthly repayments of £842, the report found.
As well as this, almost one in three (30%) over 50s have credit card debt (which amounts to £3,922 on average), one in 10 hold personal loans (£5,793), and a further 8% have overdrafts (£1,575).
One of the biggest expenses outside the mortgage is rising car finance costs – which 6% of over 50s are juggling – that now average £11,375 per borrower (£1,393 more than last year’s average).
Pros and cons of equity release
Equity release can provide those aged over 55 with a route to clear long-standing debts, supplement income or support family, all while remaining in the home they love.
But it also carries potential risks like the possibility of accumulating debt, and will reduce the amount of housing wealth that can be passed on to loved ones on death.
The most popular form of equity release, a lifetime mortgage, is technically a loan, but usually requires no repayments until you pass away or move into long-term care. However, making ad hoc or regular repayments may be recommended to keep the cost of borrowing down, where affordable.
On average, homeowners who’d consider equity release have stated they would look to unlock around £81,000, most often to clear debts, boost income or help loved ones financially, the Sun Life report found.
Others would use the funds for home improvements or long-awaited life experiences such as travel and hobbies.
It’s important to take financial advice from an FCA-regulated equity release adviser before opting for equity release.
Pros of equity release:
- Can provide a lump sum of tax-free cash for any purpose
- Allows homeowners to access their property wealth without having to sell their home
- In some cases there are no ongoing monthly repayments required
- It’s possible to ringfence a portion of your home’s value for your beneficiaries, so they can inherit it
- Affordability assessments are typically less onerous than standard mortgages
- Provides the option to gift money before death reduce the value of your estate for inheritance tax purposes
Cons of equity release:
- Equity release is a type of loan and interest is payable on the debt, which can build up significantly over the years leaving less housing wealth for your loved ones to inherit
- The maximum percentage of equity you can release typically ranges from 20% to 60% of your home’s value
- You may get less than market value for the portion of equity you release in your home
- The lump sum received from equity release can affect eligibility for certain means-tested benefits
- It can be difficult to remortgage or move home once you have opted for equity release
- Early repayment charges can apply if you repay the equity release loan sooner than expected
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