Almost a fifth (19%) of customers used equity release for this purpose in 2021.

It is the first time it has entered the top three reasons for releasing equity, according to the report from Canada Life.

Clearing an existing mortgage remained the most popular use for money gained through equity release, with 46% of equity release customers using the money for this purpose. It has been the most popular use of equity release funds from Canada Life since 2018.

A third of customers in 2021 (34%) used equity release to fund home improvements.

Customers also continued to use equity release to make substantial one-off purchases such as buying a new property (15%), booking a holiday (12%) or buying a car (11%).

Alice Watson, head of marketing, insurance at Canada Life, said: “Understanding the reasons behind releasing equity can provide an interesting snapshot into the lifestyles and needs of our customers.

“We can see that the desire to wave goodbye to mortgage payments continues to be a strong motivator to freeing up equity from a property.

“We’ve also seen a steady rise in people turning to equity release in order to cover their daily living expenses, the demand likely being driven by the current cost of living crisis.”

The data from Canada Life looks at all applications that are made by customers for equity release in each year. It has been comparing the data since 2017.