Find out what factors are behind this rise in family gifting
The proportion of equity release borrowers using funds to assist family members has surged, increasing from 13% to 22% between the first half of 2024 and the same period in 2025, according to data from insurance firm Canada Life.
The shift means that nearly one in five equity release mortgages are now taken out with the intention of providing financial support to relatives, compared to about one in seven a year earlier.
Despite this trend, the most common reason for seeking a lifetime mortgage in 2025 was to finance home improvements or adaptations, cited by 43% of applicants. This has overtaken the previous leading motivation of repaying existing mortgage debt, which accounted for 27% of cases. Clearing mortgage debt had been the primary reason for equity release between 2018 and 2024.
The market has experienced steady growth, with the Equity Release Council reporting a 10% increase in total lending from the second quarter of 2024 to the same period in 2025. The forthcoming changes to inheritance tax rules, which will include pensions within the scope from April 2027, may be influencing more families to transfer housing wealth sooner.
“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,” said Sadna Zaman (pictured right), home finance proposition development manager at Canada Life.
“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.”
Canada Life’s figures also show a seven percentage point rise in lifetime mortgages used for day-to-day living costs, up from 20% to 27% year-on-year. Applications for emergency funds have increased by 12 percentage points, from 9% to 21%.
“It’s clear that many want to see their loved ones enjoy the benefits of their support now,” Zaman said. “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.”
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