Over one in five (22 per cent) equity release applications were being used for gifting in the first half of the year, research from Canada Life has revealed.
The research, which surveyed prospective home finance customers, found this represented a 9 percentage point increase on the 13 per cent of applications that cited the same reason in H1 2024.
This finding comes amid steady year-on-year growth within the UK market, with research from the Equity Release Council reporting a 10 per cent increase in total lending from Q2 2024 to Q2 2025.
The provider also pointed out this rise occurs in the context of forthcoming inheritance tax reforms that are to bring pensions within scope from April 2027.
Canada Life home finance proposition development manager, Sadna Zaman, said: “We’re seeing more people turn to equity release not just for one-off expenses or big-ticket projects but increasingly as an estate planning tool.
“With the government recently confirming its intention to bring unused pension funds into the scope of inheritance tax from April 2027, we anticipate that even more individuals will be turning to equity release as a way to support family members through gifting.
“It’s clear that many want to see their loved ones enjoy the benefits of their support now.
“Furthermore, increasing numbers of homeowners citing day-to-day-living costs and emergency funds as the reasons for their application signals that the cost of living in retirement is becoming more challenging.
“With many current and future retirees predicted to lack sufficient pension funds to support them in retirement, our figures underscore the role that property wealth can play as a core pillar of financial planning in later life.”
Over the same period, Canada Life observed a 7 per cent increase in lifetime mortgage applications being cited for day-to-day living costs, and a 12 per cent rise for emergency fund usage, echoing wider inflationary and cost-of-living pressures.
This represents a major departure as, from 2018 to 2024, the primary reason for unlocking property wealth was to pay off an existing mortgage.
The research detailed that the top reason for loans in the first half of 2025 was home adaptations or improvements.
This was followed by clearing an existing mortgage which came in second and day-to-day living which came third.
Holidays and gifting to family and friends rounded out the top five.
tom.dunstan@ft.com
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