Canada Life, one of the UK’s leading retirement providers, routinely questions their prospective home finance customers to understand their reasons for obtaining an equity release loan.
Comparing data from H1 2024 to H1 2025, figures show there has been a 9% increase year-on-year in the number of homeowners applying for a loan for the purpose of gifting to family members or friends. In H1 2025, 22% of applications were cited as being used for gifting, whilst the previous year, 13% of applicants picked this reason.
This comes amid steady year-on-year growth within the UK market, as recently evidenced by the Equity Release Council, which reported a 10% increase in total lending from Q2 2024 to Q2 2025 and in the context of forthcoming inheritance tax reforms that are to bring pensions within scope from April 2027.
Over the same period, Canada Life has also seen a 7% increase in lifetime mortgage applications being cited for day-to-day living costs (from 20% in 2024 to 27% in 2025) and a 12% rise for emergency funds usage (from 9% in 2024, to 21% in 2025) echoing wider inflationary and cost-of-living pressures.
From 2018 to 2024, the primary reason for unlocking property wealth has been to pay off an existing mortgage. While this continues to be a key motivation, it is clear that people are increasingly releasing equity for a wider range of reasons each year.
Top five reasons for loans:
| Rank | H1 2025 | Percentage of total applications for lifetime mortgages | H1 2024 | Percentage of total applications for lifetime mortgages |
| 1 | Home adaptations or improvements | 43%3 | Clear existing mortgage | 42% |
| 2 | Clear existing mortgage | 27% | Home adaptations or improvements | 34%3 |
| 3 | Day-to-day living | 27% | Consolidating debt | 21% |
| 4 | Holidays | 25% | Holidays | 21% |
| 5 | Gifting to family and friends | 22% | Day-to-day living | 20% |
Sadna Zaman, Home Finance Proposition Development Manager, Canada Life comments on the findings:
“We’re seeing more people turn to equity release not just for one-off expenses or big-ticket projects like home improvements or paying off an existing mortgage, 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, while also potentially reducing their future inheritance tax liabilities. 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 – whether to cover everyday expenses, emergency reserves, or to fund home renovations and experiences that improve quality of life.”
