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

More homeowners than ever are using equity release to pass some of the almost £4 trillion over 55s hold in property wealth onto the next generation, according to new research.

Equity release allows older people to access the wealth in their homes, in the form of a loan against their property’s value, without needing to sell or move.

A shift has occurred in the reasons why homeowners are choosing equity release, with a record number doing so for intergenerational gifting – one way to potentially avoid inheritance tax – according to 2025’s full year data from Canada Life, which provides equity release loans.

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Last year almost a fifth (19%) of those using equity release did so to gift money to family members. This is up 3% on the previous year, and the highest figure recorded in a decade of Canada Life’s customer data.

This upward trend points to the increasing significance of intergenerational support, as older homeowners look to help children and grandchildren with financial milestones such as house deposits and education fees.

Sadna Zaman, home finance proposition manager at Canada Life, said: “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.

”This is enabling families to support loved ones with major milestones, such as home purchases or education, while also potentially reducing inheritance tax liabilities.”

How much UK property wealth do over 55s have?

Property owners in the UK aged 55 and over held a total of £3.7 trillion in property wealth in the period April 2020 to March 2022, according to Office for National Statistics data.

This represents 68% of the nation’s 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.

The 55 to 64 age group owns the greatest amount of private property wealth with a total value of £1.4 trillion, a quarter of the nation’s private housing wealth. The cohort aged 65 to 74 holds £1.2 trillion (23%) and those aged over 75 hold £1.1 trillion (20%).

Stephen Lowe, group communications director at retirement firm Just Group, said: “The sheer scale of property wealth held by older people enables them to plug into the powerhouse of financial resources held in their homes to meet a range of needs in later life – from topping up their own income in retirement to helping family.”

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.”

Reasons over-55s use equity release

Home adaptations or improvements emerged as the leading reason for using equity release in 2025, with 43% of applicants citing this when applying – a substantial 10% uplift on the previous year, according to the Canada Life data.

Whilst clearing an existing mortgage remained a key motivation, 2025 marked the first year where it was no longer the leading reason for taking out equity release, dropping 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% in 2024 to 21% 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.

Zaman from Canada Life said: “The range of uses for equity release underscores the importance of tailored, expert advice. Equity release may not be the solution for everyone, but advisers play a vital role in helping customers make informed, confident decisions about their financial futures in later life.”

How popular is equity release?

Equity release is increasingly popular. The equity release market grew 11% in 2025, according to the latest data from the Equity Release Council.

Total annual lending increased from £2.3 billion in 2024, to £2.57 billion in 2025. The Council’s market data is compiled from actual whole-of-market returns, making it the UK’s definitive equity release data.

Lifetime mortgages make up more than 99% 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.

However while equity release is becoming more popular, it is not without its downsides. Before arranging your application, a regulated equity release adviser must explain all the risks of equity release.

These include the fact the cost of borrowing will eat into the remaining equity in your home if you choose not to make any repayments on your equity release loan. Also expensive early repayment charges will apply if you pay off the equity release loan earlier than the terms of the contract allow, which can be up to 15 years.