The easing of pandemic restrictions has prompted a rise in lifetime mortgage customers using their property wealth to fund lifestyle-focused spending, analysis from Legal & General Home Finance has suggested.
Data for January and February combined indicated that the proportion of customers seeking to use lifetime mortgages to fund holidays and travel has doubled in comparison to the same period in 2021 – 20% compared to 7%.
L&G suggested that this is an indication consumer priorities have shifted in line with lockdown measures.
Elsewhere, L&G’s analysis showed the number of customers using a lifetime mortgage to purchase a car also increased by around two thirds (68%) in the first two months of 2022, compared to the same period in 2021, while the number of customers using lifetime mortgage solutions for health and medical purposes almost doubled (92%) in the first two months of the year, compared to 2021.
“As pressures, such as the pandemic, may have affected finances, the home is a valuable asset which can play a key part in supporting retirement, whether that is aspirational spending or helping younger family members who may have faced financial difficulties,” commented Legal & General Home Finance CEO, Craig Brown.
L&G’s findings follow a study by the Office for National Statistics (ONS), published in February, which revealed that 66% of adults surveyed saw their cost-of-living increase, including 87% seeing an increase in household food shop prices, and 79% experiencing rising energy bills.
Brown added: “The rest of 2022 is set to bring a new range of challenges, as cost-of-living concerns hit households across the country, and we anticipate that people might seek out lifetime mortgages for different reasons in light of such pressures, for example for gifting purposes or to boost their retirement income.
“The data shows that even as the cost of living crisis looms, customers have been using lifetime mortgages for aspirational spending. We emphasise the importance for people to look ahead and to plan and budget for their needs, goals and later life priorities.”
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