Over-55s turn to property wealth to fund retirement as average withdrawals hit £113,000

Equity release allows homeowners aged 55 and over with a property worth at least £70,000 to unlock part of their home’s value as tax-free cash without having to move.

Total lending reached £597million between April and June, up four per cent from £574million in the previous quarter. Customer numbers also rose four per cent to 13,489, according to the Equity Release Council.

The recovery follows a slow start to 2026 and suggests more homeowners are turning to the value tied up in their property despite continued economic uncertainty.

Much of the growth came from first-time customers, with 5,307 homeowners unlocking housing wealth for the first time.

This was up nine per cent on the previous quarter and returned new customer numbers to the same level seen in the second quarter of 2025, according to the Equity Release Council

While first-time customers drove much of the growth, existing borrowers also remained active. Further advances increased 12 per cent to 1,204, while the number of customers returning to draw down more money remained broadly unchanged at 6,978.

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Borrowing habits suggest homeowners are still taking a cautious approach.

The average new lump-sum withdrawal fell six per cent over the quarter to £113,779, while the average initial drawdown increased two per cent to £63,642.

Although average drawdown reserve facilities were lower than in the previous quarter, they remained seven per cent higher than a year earlier at £56,893.

This suggests many customers prefer to keep borrowing available for the future rather than taking the maximum amount upfront.

Jim Boyd, chief executive of the Equity Release Council, said: “It is encouraging to see this increase in activity despite the inherent challenge of continuing domestic and international uncertainty.

“New customer numbers have recovered to the same level as a year ago, while overall lending and customer activity have both increased over the quarter.”

He added: “The FCA recently described later life lending as a fourth pillar alongside pensions, savings and investments. Today’s figures suggest that transition is already underway.”

Alice Watson, head of home finance at Canada Life, said the figures demonstrate how housing wealth is becoming an increasingly central element of retirement planning.

Ms Watson said: “In the first half of this year, against a backdrop of higher interest rates and ongoing cost of living pressures, fewer customers used equity release to fund big ticket items such as holidays and car purchases.

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“Instead, we saw more customers using their property wealth to build financial resilience by clearing existing mortgages or consolidating debts.”

As longevity rises and pension adequacy faces growing scrutiny, Ms Watson argued that property wealth will play an ever more vital role in securing long-term financial stability during retirement.

Not everyone shares the optimism, however, as Will Hale, chief executive of Key Equity Release, urged the industry to look beyond the quarterly uptick.

Mr Hale said: “It is important not to ignore the longer-term picture, which is less positive.”

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He pointed out that second-quarter lending trailed the same period in 2025 by 6 per cent, while new customer numbers stood at just 40 per cent of the market’s peak in the third quarter of 2022.

Mr Hale said: “The lifetime mortgage market continues to be operating at a fraction of its potential given the obvious growing customer and societal need coupled with the innovation seen in the product landscape.”

If the sector is to fulfil the FCA’s ambition of becoming a genuine fourth pillar of retirement funding, Mr Hale argued that structural barriers around consumer awareness and distribution silos must be tackled as a matter of urgency.

Mainstream mortgage advisers and wealth managers need to place the home at the heart of financial planning decisions, he said.