Top 11 Equity Release Uses in 2025: How to Spend Wisely

Equity release funds are commonly used for home improvements, debt consolidation, supplementing retirement income, or providing financial help to family members. This flexibility allows homeowners to enhance their lifestyle or financial situation.
Equity Release Uses
What Can You Use Your Equity Release Money For? Can You Clear Your Mortgage, Pay Off Your Debt, Buy a Second Home or Pay for Care? Discover What the Top 11 Uses Are for Equity Release in 2025.
This article contains tops tips from our experts, backed by in-depth research.

Contributors:

Francis Hui
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Key Takeaways
  • Common uses of equity release include funding retirement, paying off debts, home improvements, and gifting money to family members.
  • You can fund your retirement using equity release by turning a portion of your home's value into a cash sum or regular income.
  • You can use equity release to fund home improvements, which can increase the value of your home in the long run.
  • It could be used for debt consolidation, allowing you to pay off your existing debts and manage a single, potentially lower, monthly repayment.
  • It can be used to help your family financially, for instance, you can gift a 'living inheritance' to support a child's house purchase or education costs.

The top equity release uses could be the key to unlocking all your bucket list goals.

The amount released in 2022 amounted to over £6.2bln, according to a recent Equity Release Council report.1

Could you be holding a piece of that pie?

You could be sitting on a solution to your financial challenges without even knowing it. 

That is where equity release comes into play.

In This Article, You Will Discover:

    We have spent hours researching and examining statistics to unpack the top ways to use the money in 2025.

    What we have discovered could be life-changing for you and your family.

    Do you have an idea of what you could spend this kind of income on? 

    If not, here are some ideas.

    What Is Equity Release?

    By engaging in equity release, homeowners can tap into the wealth tied up in their property.

    This financial mechanism is tailored for older individuals looking to optimize their asset's value in retirement.

    The process is designed with the homeowner's needs in mind, allowing them to access equity without forsaking their home.

    It's a strategic move to ensure financial security and independence in later years.

    Learn More: What Exactly is Equity Release?

    What Are Common Uses for Equity Release?

    The most common include funding a dream holiday, renovating homes, or paying off debt.

    Here are the 5 most common reasons people release equity:

    • Fund a dream holiday.
    • Assisting family.
    • Make home improvements.
    • Clear debts and mortgages.
    • Live a more comfortable life.

    It is imperative to remember that equity release is not a viable solution for everyone. 

    There are disadvantages that must be considered before committing to a plan. 

    These can include:

    • Negatively impacting the inheritance you wish to leave for your heirs. 
    • Affecting your chances of qualifying for means-tested state benefits.
    • Additional fees if you decide to settle the plan early.
    • It can be an expensive form of borrowing.

    Read On: Is Equity Release a Good Solution for Me?

    Why Do People Release Equity From Their Home?

    People release equity from their homes to access tax-free cash that would otherwise remain unused and tied up in the value of their properties.

    The reasons for needing the funds vary, but the attraction is that the cash can be used for various financial goals.

    How Uses Differ by Applicant Age

    Equity uses differ slightly by applicant age. 

    Where the younger age bracket prefers to obtain equity release to pay off their mortgage, those in the older age bracket access funds to help fund care.  

    Let us have a closer look. 

    Aged 55-70 

    People in this age bracket typically access equity release to pay off their mortgages, pay for home improvements, and supplement their income. 

    Aged 70-85 

    Retirees in the middle age bracket generally opt for releasing funds to supplement their income and pay for home improvements. 

    They are also the most likely age group to use the funds as family gifts. 

    Aged 85+ 

    Those that fall into the older age bracket most commonly choose equity release to help fund their in-home or permanent care.

    Top 11 Reasons People Release Equity in 2025

    People choose to release equity for several reasons, including funding an early retirement, assisting family, and making home improvements. 

    As the times change, so does how people use their money. 

    Here is a closer look at the top 10 reasons people release equity in 2025.

    #1 - Early Retirement

    Equity release for early retirement is a common use in 2025. 

    This is often a lifeline for those approaching retirement who find themselves without a job or risk losing their position to someone younger.

    The money you access could be used to supplement your income until you are able to draw from a private pension or until you receive your state pension.

    Provided you meet the minimum equity release age limit of 55 and live in the UK, you will be able to access the value of your home as a tax-free sum of money.

    A few other qualification criteria need to be met, but those will be provider-dependent, and your advisor or broker will run through those with you. 

    #2 - Gifting

    Gifting with equity release can help your family members or heirs meet the demands of these tough economic times.

    This way, you can witness your family enjoy a more comfortable life.

    You can choose equity release to help your children buy a house or to give your children an early inheritance.2

    #3 - Repay an Existing Mortgage

    You can opt for equity release to pay off your mortgage.

    In fact, as per the Equity Release Council3, you must pay off your mortgage before spending the cash you released from the value of your estate on anything else.

    While you may not use it to fund an extension, it is a perfect way for you to no longer worry about meeting the financial demands of a mortgage, should you be battling to make the payments.

    #4 - Purchase a New Home

    You can select equity release to buy a new home

    This is particularly beneficial if you are worried about not being able to afford a mortgage on the new property.  

    Note, you would be able to borrow against your future home. 

    How it works is you would sell your current home, pay off the outstanding mortgage, and buy a new property simultaneously. 

    Your new property would then have a lifetime mortgage against it, which you would be under no obligation to pay during your lifetime.  

    #5 - Purchase a New Car

    You can decide on it to buy a new car. 

    The majority of auto financing4 is based on a secured loan and requires that you repay the principal after selling your vehicle.

    The vehicle interest rate may be considerably greater than the mortgage rate, depending on your credit score.

    Lenders consider a home to be an appreciating asset5, while cars are depreciating assets that generally lose about 20%* of their value each year.

    Also, you may want to buy a classic vehicle as a collector’s item or one that is beyond the age limit for standard car financing.

    *The above is for indicative purposes.

    #6 - Home and Garden Improvements

    You can use the money to fund your home improvements.

    Furthermore, renovating your home or garden will likely increase the value of your estate, meaning that your home may sell for substantial equity.

    #7 - Pay off Debts and Loans

    It is possible to select these products to pay off debts.

    If the interest rate on your equity release plan is lower than that of your line of credit, then, with long-term benefits, you can use it to clear your debts.

    Furthermore, you will not need to worry about paying off your loan in your lifetime.

    As always, you need to discuss these terms with an independent financial advisor or broker to understand all the comparative risks and costs.

    #8 - Help Fund a Dream Holiday

    You can use equity release to go on a dream holiday. 

    Additionally, you can choose to receive a larger lump sum to fund a once-in-a-lifetime trip. 

    What better way to create lasting memories than to take the entire family - your children, their spouses, and your grandchildren - on a holiday to top all holidays?

    #9 - Help Fund Care at Home

    You can use equity release to pay for care.

    If you want to remain home, you can unlock equity to hire private in-home care7 and convert your home for fragile care, should the need arise.

    While you can access mobility care through local authorities, you may want more high-tech equipment.

    #10 - Increase Disposable Income in Retirement

    Yes, it is commonly used to increase disposable incomes in retirement. 

    Sometimes your pension savings are simply not enough to keep you going.

    With life expectancy on the rise,8 many people live longer these days, making the cost of retirement substantially greater.

    #11 - Pay for College

    Equity release to pay for college is a way to avoid steep student loans.

    Whether you want to study later in life or help a grandchild with obtaining a degree, this is an option to discuss with your financial advisor or equity release broker.

    Common Questions

    What Are Common Uses of Equity Release?

    How Can I Use Equity Release to Fund My Retirement?

    Can Equity Release Be Used for Home Improvements?

    Is It Possible to Use Equity Release for Debt Consolidation?

    Can Equity Release Be Used to Help My Family Financially?

    Can I Release Equity to Buy a Second Home?

    Can I Use Equity Release to Buy Out My Partner?

    Can You Use Equity Release to Reduce Your Inheritance Tax Bill?

    Should I Use Equity Release to Give an Early Inheritance?

    Can I Use Equity Release to Help Out Family Members?

    In Conclusion

    There are almost no limits on how you can use your tax-free funds.

    However, ensure that whatever you decide, it is well thought out, and you have considered your entire future. 

    You do not want to unlock the funds now only to regret it in the long run.

    If you are younger (55/60), just ensure that if you are using the equity tied into your home now, you will not be in a destitute position when you are older. 

    Therefore, seek advice from a leading advisor or broker and let them help you make the smartest decisions regarding the uses for your equity release.

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