Equity release has become an increasingly popular means by which many homeowners are able to fund a more enjoyable retirement, and new research has now highlighted some of the top choices people make when deciding where to spend this extra cash.
According to the annual Equity Release Market Monitor from Key Retirement, more than 10,000 people across the UK made use of equity release measures in the first six months of 2015.
As a result, a combined £710 million was made available to property owners through the release of money tied up in their home, with an average payout of approximately £75,000.
Group director for Key Retirement Dean Mirfin stated that ‘property wealth is making a massive contribution to retirement planning and the equity release market is growing rapidly in response to this ‘.
He added that it remains likely that the sector will continue to grow in the years ahead, as both the Treasury and the financial regulator aim to better educate the public on the benefits and drawbacks of equity release.
The results of the company ‘s research also revealed some of the most popular ways in which people have been making use of the release of equity from their property in the last year, with garden and home improvements top of the list.
Overall, 61 per cent of respondents said they either already have or are planning to spend money in this area.
Other popular choices included 31 per cent of people who said they plan to use this money to fund holidays, either overseas or in the UK, as well as 30 per cent who will use some or all of their equity release to pay off existing loans or credit cards.
Meanwhile, an altruistic 21 per cent of respondents said they would be helping family or friends to pay off their own debts thereby highlighting the fact that equity release can not only be of potential use to homeowners themselves, but to whole communities when it is carried out in a responsible manner.
All in all, equity release continues to grow in popularity as a means for people up and down the country to fund their golden years. Equity release schemes in the UK are currently for individuals aged 55 and above. However other solutions such as remortgaging or secured loans are available for younger borrowers seeking to obtain a loan against the equity in their property.
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