In the first quarter of this year, 14% of equity release customers used funds to support the cost of day-to-day living amid rising inflation and the cost of living crisis in the UK, according to Canada Life customer data.

The data showed that 12% of applications were also made in order to consolidate unsecured debts.

Over a third (36%) of applications in Q1 were from customers looking to clear the remainder of their mortgage.

However, Canada Life says people were still keen to make home improvements in Q1, with a quarter releasing equity for this purpose. 

Meanwhile, data found that customers also continued to use equity release to make substantial one-off purchases such as booking a holiday (10%), buying a new property (9%), or buying a car (8%). 

Earlier this year, Canada Life revealed that the amount of equity available for release in UK homes increased by £25bn in the final quarter of 2021.

Canada Life head of marketing for insurance Alice Watson says: “Record-breaking inflation and a surging cost of living is understandably leading many people to take an informal audit of their outgoings and where their wealth lies.”

“From Q1’s results we can see that the desire to clear a mortgage continues to be a strong driver to pursuing equity release but we’ve also seen a continuous flow of people turning to equity release in order to cover their daily living expenses or consolidate debts, the demand likely being driven by the current cost of living crisis.”

“The variety of reasons given for releasing equity highlight the flexibility and accessibility of modern products allowing families the ability to enjoy their retirements comfortably in a way that suits them.”

“However, equity release is a lifelong financial decision, so it is essential that people seek financial advice and talk through their decision with loved ones before agreeing to a product,” Watson adds.