Spending Your Equity Release Income in 2022

Gain Inspiration From What People Spend Their Equity Release Cash On
Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui
People Are Always Looking for Ways to Make Some Extra Money, and Sometimes the Best Option Is to Take Out a Home Equity Release. But What Do People Spend Their Equity Release Cash On?

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Imagine suddenly having all this income flood your way. There are so many ways to spend your equity release income.

Having a positive bank account with numbers that you may have never seen before.

That’s what happens when you release equity from our home.

The big question is: what do people spend equity release on. Or, more accurately, what can you do with all this financial freedom.

We’ve delved into the minds of numerous over 55s who’ve released equity from their home to find out what they have spent the money on in 2021.

Let’s discover!


What Do People Spend Their Equity Release Cash On?

The great thing about equity release is that the sky’s truly the limit. You release a tax-free income to spend in any way you wish.

Of course, circumstances do differ. You might be in a position where you don’t have a private pension or financial support from your family.

If not, you can use equity release to supplement income, allowing you to maintain your standard of living or simply to get by.

In other cases, individuals will use equity release for both day-to-day living and the chance to buy a big-ticket item.

Finally, others might be in the position to use the money to splurge on home renovations or a world tour.

Whatever your decision, be wise about the money and think about your future. You don’t want to splurge1 and then end up income-free.

Pay Off Debts

Many people will use their equity release cash to pay off debts, freeing themselves of monthly repayments.

It’s not uncommon for people with a mortgage or other loans to clear them with equity release.

Benefit Payments

For some people, their age or other factors mean that they no longer qualify for a state pension2.

In these cases, the equity release loan can provide them with an income to help make ends meet. Regular benefit payments can be life-changing.

Pay For Long Term Care

One of the reasons people take out equity release loans is to help pay for care, which may be needed due to illness or other factors.

Not everyone wants to go to a retirement home. Instead, they use equity release to get long-term care and all the advanced equipment that could make later life easier.

Paying for Care Homes

Many people have partners who can no longer manage to live independently and need permanent care.

These individuals will use equity release loans to achieve this objective.

This may be a temporary measure or, in some cases, permanent depending on what is available and affordable at that time.

Equity release provides an alternative way of paying towards care homes without selling your property which might not give you enough money anyway!

Make Home Improvements  

Do you have a dream makeover wish? A common use for equity release is to make home improvements or extensions on the home.

Additionally, you can make renovations that could help with making your home more accessible for older folks.

Buy a New Car

Some people will use their equity release cash to buy themselves a new car, a much-needed treat.

Imagine buying a car, cash, and not having to worry about monthly repayments!

Invest in Property

With property prices skyrocketing in recent years, some people will use their equity release cash to buy a new home to rent out, and others may choose to invest it.

The decision is entirely up to you but, be careful not to overstretch yourself. As with any investment, the market may not always be on your side.

Purchase Mobility Equipment

If you have become reliant on equipment such as stairlifts, mobility scooters, and other aids to help with day-to-day life, then an equity release loan may be the perfect solution.

You can pay for these items outright or use your equity release cash to finance their purchase, making it easier to manage financially!

Holiday Spending

Some people will use their equity release cash to fund a dream holiday or to have some much-needed time away.

Whether it’s an exotic3 trip or just down the coast, this is often what older generations think of first when considering how best to spend their money, and it’s not something to dismiss.

Financial Independence

For some people, their equity release cash can be used towards financial independence and ensuring that they can support themselves in the future.

This might involve researching the best annuity4 providers or investing their cash in stocks, bonds, and other investments.

Health Care

Those who are too ill to work or require regular medical care might need financial support.

Equity release is one way of providing this and helping you maintain your independence for as long as possible if you don’t have family members who opt to support you.

Helping Family Members

In some cases, you can use equity release cash to help family members.

This may involve paying for their care or helping them financially get back on track after a difficult time such as unemployment or illness.

In 2021, in a post-COVID5 world, more and more people require financial assistance to get by. This could include your close friends or family.

Retirement Planning

Some people will use their equity release cash to help with retirement planning.

The money can be used towards any investment or savings, such as a private pension6 fund (although you would need to ensure that this is a beneficial option first).

Regardless of what it’s spent on, you must make time to research these decisions carefully so that they are right for you!

Common Questions

How Much Equity Release Can I Get?

How Much Does an Equity Release Cost?

How Much Income Tax Do I Have to Pay?

How Do I Know if Equity Release Is the Right Option for Me?

In Conclusion

Equity release is a serious financial decision. You should consult with an independent financial adviser before making any final choices.

It’s important to know that you can spend the money you receive from equity release in many different ways, but it’s a loan and not free money.

Be sure to have a plan on how you’ll spend your equity release income to make the most of it.

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Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

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