Figures compiled by Key show that the value of equity released hit £3.6bn in 2018, a 19 per cent increase on the £3.01bn figure recorded a year ago.
This translates to almost £10m a day released over 47,081 plans at an average of £76,500 each. For reference, in 2014, the total amount released through an equity plans was £1.4bn.
In terms of what people are using their money for, Key reports that the most popular choice is home and/or garden improvements at 64 per cent, with 33 per cent using equity release to go on holiday, and 31 per cent to pay debts. As in 2017, 12 per cent of customers used equity release to help with regular bills.
Breaking things down regionally, the South East housed the largest number of plans sold, at 11,777 with a total value of over £1bn, London came second at 4,850 and £663m, and the South West lies in third, at 5,546 worth a total of £421m.
Northern Ireland saw the fewest plans sold, at 427 worth a total of just under £300m. However, with last year’s plans sold standing at 291, this 47 per cent growth in activity was the highest recorded on a regional basis.
Key chief executive Will Hale says: “The equity release market recorded another strong year of growth in new lending, taking it to £3.6bn, and has doubled in size in three years… once further advances and additional drawdown is included it is getting close to £4 billion.
“The growth in gifting highlights the intergenerational benefits of equity release for families with money being used to clear debts, fund university fees and pay for house deposits and weddings. Even the use of equity release to fund home and garden improvements has benefits for families as it helps people to ‘age-proof’ their home and preserve wealth for the family.”
More 2 life chief executive Dave Harris adds: “Today’s record-breaking figures from Key once again demonstrate the consumer appetite for equity release. Almost hitting the £4bn mark is a huge achievement for the market and one that was inconceivable just a few years ago.
“As the equity release market looks to build upon last year’s fantastic results, innovation and funding will be key in ensuring we are able to sustain this type and rate of growth.”
Equity Release Council chairman David Burrowes comments: “Consistent growth in recent years has been driven by increased product flexibilities and innovation to meet a variety of consumer needs. Intergenerational support remains a key usage, which highlights the important role that equity release now plays in the later life landscape on both an individual, family and societal level.
“Today’s market is built on a combination of increasing choice and robust consumer safeguards. Looking ahead, it is important that this is maintained as the range of later life products continues to grow. It is vital we encourage customers to consider all available options in terms of their wealth and assets to get the best outcomes from a rounded approach to retirement planning.”