UK Homeowners Over 55 Are Using Their Property to Unlock Extra Cash — Here’s How
In the UK, more homeowners over 55 are turning to equity release to access funds tied up in their property. Without selling or moving out, many are exploring how they can boost their income in retirement by unlocking part of their home’s value. Here's what to know in 2025.
How equity release works for over 55s in the UK
Equity release allows homeowners aged 55 and over to access part of their home’s value without needing to move. The most common form is a lifetime mortgage, where you borrow against your home and interest rolls up over time. The loan is repaid when the home is sold—usually after death or moving into long-term care. Another option is a home reversion plan, where you sell a portion of your property for a tax-free lump sum or regular payments while retaining the right to live there rent-free.
Ways to unlock home value without selling
Besides equity release, there are other methods to unlock your property’s value. Downsizing is the most traditional route—selling your current home and purchasing a smaller one, using the difference as income. Alternatively, some consider remortgaging or letting out part of the property, such as a room or annex. These options, however, often involve lifestyle adjustments or may not be feasible for everyone. That’s why equity release has become attractive for retirees who want to maintain their living situation while accessing additional funds.
Lifetime mortgage and home reversion explained
A lifetime mortgage is a loan secured against your home, available to people aged 55 and over. You retain full ownership and can choose whether to make repayments or allow interest to accumulate. When the house is eventually sold, the loan and interest are repaid.
Home reversion plans are different—you sell part or all of your home to a provider in exchange for a lump sum or regular income. While you remain in the home rent-free, you no longer fully own it. This option typically suits older homeowners, as the amount received depends on your age and health. Both plans require careful consideration, especially regarding inheritance implications and future flexibility.
Risks and benefits of equity release in 2025
As of 2025, equity release products have evolved to offer more protections and flexibility, including fixed interest rates, no-negative-equity guarantees, and options to repay early. However, it’s not without drawbacks. Interest compounds over time, potentially reducing the value of your estate. It may also affect your eligibility for means-tested benefits or care funding. That said, equity release can be a lifeline for those wanting to boost their retirement income, fund home improvements, or assist family financially—without selling their home.
Is equity release the right choice for your retirement?
- Check your eligibility: You must be at least 55, own your home, and meet the provider’s criteria.
- Equity release can offer peace of mind by turning property value into accessible cash.
- Independent financial advice is essential before proceeding.
- Releasing equity early can mean a smaller inheritance left for loved ones.
- Some plans allow partial repayments or interest payments to reduce long-term costs.
Comparing real equity release providers in the UK
| Product/Service Name | Provider | Key Features | Cost Estimation |
|---|---|---|---|
| Lifetime Mortgage Classic | Aviva | Flexible repayment options, no-negative-equity | From 5.40% APR (fixed) |
| Tailored Lifetime Mortgage | Legal & General | Customised plans with inheritance protection | From 5.20% APR (fixed) |
| Interest-Only Lifetime | More2Life | Monthly interest payments to reduce compound growth | From £200/month (example) |
| Home Reversion Plan | Bridgewater | Sell part of home, retain right to live rent-free | Based on age/home value |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
Final thoughts on equity release for UK homeowners
Equity release is not a one-size-fits-all solution, but for many over 55s in the UK, it offers a way to enjoy retirement with greater financial freedom. Understanding your options, consulting an expert, and considering your long-term needs will help determine whether it’s the right path forward.
The shared information of this article is up-to-date as of the publishing date. For more up-to-date information, please conduct your own research.
