Enquiries for equity release increased by 110% between the first half of 2019 and the first half of 2021, according to KIS Finance.

The equity release adviser said that although the number of enquiries was steady throughout 2019, it then increased quickly during the second half of 2020 and throughout 2021 so far.

KIS Finance suggested that the level of interest in equity release has been affected by the pandemic, adding that this can be seen when analysing the reasons customers gave for taking out a lifetime mortgage.

These were:

• Supplementing income – 36%
• Offering financial support to children/grandchildren – 30%
• Making home improvements – 18%
• Other – 16%.

In addition, nearly four in 10 (38%) applicants used the funds raised from equity release to clear existing mortgage facilities before receiving the proceeds from their new lifetime mortgage.

Sponsored

Holly Andrews, managing director at KIS Finance, said: “It’s been very interesting to see how the enquiries for equity release have grown over the last couple of years, and especially during the last few months.

“The pandemic has clearly had an impact on many people’s income and significant numbers have turned to equity release as a way of accessing financial support for both themselves, and for family.

“36% of customers turned to equity release to support their income, and this includes people who are still working as well as those who are retired and receiving a pension.”

Furlough impact

Figures from the Office for National Statistics said that the 65 and over age group had the highest number of furloughed employees at the end of June, followed by those aged 55 to 64.

Andrews continued: “This will be a leading factor as to why so many are turning to other options rather than potentially dipping into savings or pension pots early. When the furlough scheme ends in September, we are expecting to see a new wave of redundancies which could potentially find a lot of people in their 50s and 60s unemployed and struggling to find work.

“This in turn could lead to another surge in lifetime mortgage enquiries as more and more seek financial support.”