What can you do with equity release money?
Last updated 28th March 2024
5 min read
Equity release allows you to access money tied up in your home – either as a lump sum or in instalments – while continuing to live there. Once you’ve paid off any outstanding mortgage, the rest of the funds are yours to spend as you wish.
Many people use the cash to prepare for the future. Others spend some of it on big purchases. Here’s some inspiration for what you could do with money from equity release.
Preparing for the future
Many people who take out equity release are preparing for their future, by putting the cash towards things that will improve their quality of life.
When approaching or entering retirement, you may find that your income drops significantly and your pension isn’t quite enough. This is why many prioritise ‘topping up’ their income and pension with the money released from their home.
Other ways that the cash from equity release can help to prepare for the future include paying off debt – such as a mortgage, personal loans, or credit cards – or affording an appropriate level of in-home care.
Read our dedicated article to find out in more detail how equity release can help you prepare for the future.
After these priorities are covered, some people choose to spend remaining money on big purchases they’ve been dreaming of – such as holidays, home improvements, or cars. Find out more about these possibilities below.
Holidays
Who doesn’t love a good holiday? Especially in later life, when you might have more free time for such pleasures. But taking those dream trips can be costly, even reaching into the tens of thousands over a short period of time.
SunLife's latest Life Well Spent report found that over 50s typically take one international holiday and two staycations every year. With an average spend of around £2,400 abroad and £700 on each staycation, trips can reach a hefty £3,800 over the course of 12 months. However, our report also showed that three quarters of over 50s felt happier after holidays – arguably making it a very worthwhile investment.
Equity release can enable your dream trips by providing the cash needed. And taken in smaller instalments, it could allow you to book those flights and hotels at regular intervals across the year. In fact, our report revealed that a third of people who took out equity release put money aside for holidays – around an average of £6,400.
If you’re dreaming of stunning beaches, why not head to the Maldives or Caribbean? These picture-perfect destinations were ranked very highly in our list of dream holidays for over 50s. Or maybe far-flung Australia or New Zealand take your fancy, well known for their varied and beautiful landscapes.
Or if you want somewhere closer to home, how about Cornwall? The county topped our list of dream destinations within the UK, offering the best of British sun, sand, and sea – as well as an array of activities for lovers of the outdoors. Cornwall also came first in SunLife’s research around the UK’s best campervan hotspots.
Read more of the holiday-related findings from our Life Well Spent report.
Home improvements
Money that you take out with equity release can be redirected into your home. By making improvements – from big projects such as extensions or new kitchens, to smaller fixes like painting or new carpets – you could improve the value of your property, as well as your happiness.
Life Well Spent found that three quarters of over 50s have undertaken some form of home improvement. The costs can vary greatly – with painting and decorating around £500, but extensions averaging a whopping £29,000. However, 9 in 10 people reported that the final product was worth the money.
With such potentially high costs, it’s not surprising that people who took out equity release chose to direct the funds towards home improvements more than anything else – two fifths in fact. An average of around £10,000 was spent on making the changes needed.
What improvements could you make to your home? Some of the cheaper, simpler tasks were the most popular, such as painting and decorating, new carpets or floors, and garden landscaping. We also found that bathroom refitting, kitchen refitting, and replacement windows or doors were high on the list of priorities. But it’s entirely up to you what would make your house feel homelier!
Check out our dedicated page for more home improvement inspiration.
Big purchases
Beyond holidays and home improvements, there are a range of other big purchases people make in later life – desirable items that may not have been affordable before. Many of these enable and enhance travel, hobbies, and everyday activities.
According to Life Well Spent, two fifths of over 50s have made a big purchase in the past five years. And of these, three quarters reported feeling happier as a result of their spend.
The most common big purchases were cars or motorbikes, with their cost averaging £15,000. The priciest choices were holiday homes and mobile homes, both around £21,000. Over 50s also tended to put money aside for bicycles and expensive clothing or jewellery.
Read more on big purchases in later life.
What else can you do with equity release money?
The list of what you can do with equity release money is pretty much endless – these are just a few of the more popular choices. Some people have been known to put the cash towards a wedding or even cosmetic surgery. Others have invested it back into property by purchasing a second home.
For many, the money from equity release is useful to prepare themselves and others for the future. This could mean topping up their income or pension, taking an early retirement, paying off debt, or affording care.
Alternatively, giving cash gifts to family members can help them with important things such as homes, vehicles, weddings, education, healthcare, children, or unemployment.
Ultimately, how you use your equity release money is up to you. You can spend it on some of these big purchases, prepare for the future, or do something completely different.
It’s important, though, to seek the help of a financial adviser before proceeding with equity release. You’ll want to consider the pros and cons, and even if an alternative solution may be more suitable for you.
Check out some of these articles to learn more about equity release and what you could do with the money:
The thoughts and opinions expressed in the page are those of the authors, intended to be informative, and do not necessarily reflect the official policy or position of SunLife. See our Terms of Use for more info.