Total annual lending in the equity release market grew by 11% to £2.57bn in 2025 (224: £2.3bn), according to the latest figures from the Equity Release Council (ERC).
Lifetime mortgages continued to dominate the market, making up over 99% of the market.
The Council claims that equity release now supports around £1 in every £90 spent by retired households.
In the fourth quarter of 2025 the average release rose to £123,174, an increase of 5.7% year-on-year.
According to a survey of advisers by the ERC, 40% of borrowers using equity release were putting the funds towards ‘positive uses’ such as paying for home improvements (21%) or gifting to family (13%). Just a quarter (26%) were using equity release to clear mortgage balances.
Advisers also expected the market to continue to grow, with over 80% saying they expect more lending in 2026 than in 2025.
David Burrowes, chair of the Equity Release Council, said that he expects work from the FCA to continue to support growth in the equity release market.
He said: “The Council sees sustained long-term growth being supported by increased collaboration across the later life lending sector and regulatory engagement. In Q1 of 2026, the Financial Conduct Authority launches a focused later life lending market study, examining how mortgages and property-based solutions can better support consumers borrowing into retirement.
“This is an important step which reflects the reality that borrowing in later life is becoming more common and that the market must continue to evolve to deliver good consumer outcomes. That regulatory focus, combined with collaboration and continued product innovation, gives us confidence in the sector’s long-term direction. We have never had a better opportunity to bridge the retirement later life funding gap.”
The data from the ERC is compiled from actual whole-of-market returns.
Sadna Zaman, home finance proposition manager at Canada Life, agrees that this latest data from the ERC shows that equity release is becoming an increasingly mainstream component in retirement finances.
She said: “As life expectancy rises and pension savings are stretched further, later life lending is playing a valuable role in helping homeowners maintain their income and achieve greater financial flexibility in retirement.
“Last year we saw a marked shift in the conversation around the role of property wealth as a critical part of the toolkit for retirement planning, driven by the FCA’s review of the mortgage market. It has been hugely positive to see the regulator focus on the potential of the later life lending sector to meet the evolving needs of customers. With a forward-looking market study and a review of advice rules scheduled for early this year, the regulator has set the stage for a busy year of policy development and engagement.”
The Equity Release Council is the representative trade body for the equity release sector. Since 1991, more than 680,000 homeowners have accessed £50bn of property wealth via Council members to support their finances.