There has been a threefold increase in the number of older homeowners using equity release to fund holidays, according to the latest data.

Data from Legal and General Home Finance shows that 20% of drawdown customers used these funds for travel in the first two months of 2022. This compares to just 7% in the same period last year.

L&G says this change has been prompted by an easing in the pandemic restrictions. However it said there was also an increase in other ‘lifestyle spending’, with the numbers using a lifetime mortgage to purchase a case increasing by two-thirds, year on year, suggesting consumer confidence is returning.

Over the same period the number of customers using lifetime mortgage solutions for health and medical purposes almost doubled, in the first two months of 2022, compared to January and February 2021. L&G says this is likely due to the increased emphasis on personal wellbeing and extended NHS wait times for certain procedures.

While figures have not returned to pre-pandemic levels, the data indicates that consumer spending confidence is gradually returning. However, L&G warns that spending habits may change again as a result of the cost of living crisis. A study by the Office for National Statistics in February, revealed that 66% of adults surveyed saw their cost-of-living increase, including 87% seeing an increase in food prices and 79% experiencing rising energy bills.

It remains to be seen whether homeowners will use equity release to try and cover these increases day-to-day living costs.

Legal & General Home Finance CEO Craig Brown says: “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.

“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.”