Pensioners use equity cash for improvements

Nearly two-thirds of pensioners who unlock money from their homes use some of the cash to improve their property. Around 63 per cent of people who released equity from their property during the three months to the end of September used the money to fund home and garden improvements or essential maintenance, up from just 43 per cent during the same period of 2009, according to equity release adviser Key Retirement Solutions.

The group said the trend may reflect the fact that in the current economic climate people were unable or unwilling to move, and were choosing to improve their properties instead. It added that the money people spent on their homes was also likely to reflect a trend for retired people to spend more time in their property, making improving it a greater priority. There was also a significant increase in the number of people releasing equity to pay for holidays.

Just under a third of people who took out an equity release plan during the third quarter of the year put some of the cash towards a holiday, compared with 19 per cent in the same period last year. Overall, retired people have unlocked 613.3m from their homes during the first nine months of 2010, up from 586.7m during the same period of 2009.