Equity release funds currently account for one in every £90 spent by retired people within the UK, research published by Legal & General and the Centre for Economics and Business Research (Cebr) has indicated.

According to L&G’s findings, the number of new homeowners turning to equity release each year is also expected to rise by more than a third in the next 10 years.

In 2021, equity release funded an estimated £3bn in retirement spending, according to L&G and Cebr’s The Equity Economy Report. From this, equity release approximately funds one in every £90 spent domestically by retired people.

Modelling by Cebr has also shown that total retirement spending funded by equity release could top £4bn this year, as homeowners increasingly look to property wealth to support their retirement.

According to data from Cebr, the share of total property wealth held by over-65s has increased from 28% to 37% over the past 12 years.

L&G stated that this, coupled with the rising value of homes in recent years, seems to be driving more homeowners to consider the role that property wealth might play in supporting them financially in retirement. One in 20 homeowners are currently using equity release to fund retirement but this is anticipated to almost double to one in 10 (11%) based on the anticipated plans of younger homeowners.

“Our report highlights that homeowners are increasingly planning to use equity release or other ways of accessing property wealth to help fund later life,” L&G Home Finance CEO, Craig Brown, commented.

“This shift reflects the boom in property values, which have made our homes such an important asset, but it also demonstrates how far the equity release market has come through the introduction of product innovations and how it has become a more suitable solution for a wider range of people.

“It has always been L&G’s view that changing customer needs and attitudes would see equity release transition from specialist product to a mainstream option. The impact of the equity release market is more significant than just the spending power it gives to customers, it also makes a positive contribution to the UK economy.”

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