Equity release: what you need to know

August 12, 2026

For many older homeowners, the property they live in is their biggest financial asset. After decades of rising house prices, many people in their 70s and 80s have significant value tied up in their home, sometimes far more than they hold in pensions or savings. As retirement progresses, priorities change, and they look for ways to release some of that equity, whether to help fund their lifestyle or to pay for increasing care needs.

This is where equity release can play a role. It allows older homeowners to unlock some of the value in their property while continuing to live there.

But while it can be helpful, it’s a complex area and not a decision to take lightly, making professional advice essential.

Graham Lee is a specialist in later life lending, including equity release, and is registered for later-life lending with the Society of Later Life Advisers (SOLLA).

He says, “I’ve had an unusual increase in enquiries about equity release in recent months. Many of these enquiries are from people who have tried to ‘go it alone’ via their existing lender when moving home, but have hit problems due to the complex nature of these mortgages.

“There are several pros and cons to equity release,” he adds. “So I’d always recommend that people take professional advice – even though existing lenders sometimes tell people who are moving that they don’t need it. An IFA not only helps you to avoid the pitfalls, but also has full market access, so can often find you a better deal than your existing lender can offer. Equity release lenders are competing with each other in the current market, so it pays to work with someone who has your best interests at heart.”

Why consider equity release?

1. Supplementing Retirement Income. As pensions and savings are drawn down, some people find their income no longer stretches as far as it used to. Equity release can provide a tax‑free lump sum or regular income to support day‑to‑day living.
2. Funding Home Improvements or Adaptations. Many people want to future‑proof their home; installing stairlifts, wet rooms, or accessibility features. Equity release can help fund these changes without dipping into savings.
3. Helping Family Members. Some people use equity release to support children or grandchildren with deposits, education costs, or financial challenges.
4. Covering Unexpected Costs. From medical expenses to rising household bills, or replacing essential appliances, equity release can provide a financial buffer.
5. Planning for Future Care. Equity release can help fund care at home or contribute towards care‑home fees later in life, giving families more flexibility and choice.

Equity release: the pros

Equity release can be helpful, but as Graham says, only when used appropriately.

• You retain ownership of your home (with a lifetime mortgage).
• No monthly repayments are required, unless you choose a product that allows them.
• Funds are tax‑free, whether taken as a lump sum or in stages.
• You can stay in your home for life, provided it remains your main residence.

For many older people, these features offer reassurance and flexibility.

Equity release: the cons

Before committing to a loan, it’s important to understand the implications:

• Interest rolls up if you don’t pay it off, meaning the amount owed can quickly grow over time.
• It will reduce the value of your estate, leaving less for beneficiaries.
• Early repayment charges may apply if your circumstances change.
• It may affect eligibility for means‑tested benefits.
• Moving home later can be more complicated, depending on the product.

Because of these factors, equity release should always be considered as part of your wider financial planning.

Why Professional Advice Is Essential

Equity release is a regulated, specialist area, and choosing the wrong product can have long‑term consequences. A qualified Independent Financial Adviser (IFA) will:

• Assess whether equity release is genuinely appropriate for your circumstances.
• Compare products from across the market, not just one provider.
• Explain how equity release affects your estate, inheritance planning, and tax position.
• Explore alternatives, such as downsizing, retirement‑interest‑only mortgages, or using other assets first.
• Help you plan for future care needs, ensuring you retain enough flexibility and financial security.

Advice from a specialist IFA like Graham will help to ensure you make a decision that supports both your lifestyle now and your long‑term wellbeing.

How Graham has helped

Graham says, “I recently helped a retired couple in their 80s to sort out an issue with their equity release mortgage. They’d been promised a loan by their existing lender, who assured them they didn’t need an IFA but when it came to it, there were obstacles. One of these was the need to make quite a complex application online, through the lender’s secure portal. If you’re tech savvy, that’s all very well, but if you struggle with these systems, it can be really difficult. Another issue was that their existing lender couldn’t lend sufficient funds to cover their moving costs as well as their property needs. This is quite a common problem.”

In this case, the couple was buying another property, and the delay with their lender was causing problems up and down a property chain, so they needed a quick solution.

Graham was able to identify the most appropriate lender for their needs, and also looked with them at the reasons for the loan, and how it would affect their overall financial plan.

“This couple have no children, and with an estate worth around £1 million, there would be significant IHT due as the estate wouldn’t benefit from the residential nil rate band which applies if you leave your main residence to your direct descendants. By talking to me, as well as releasing equity to fund their property purchase, they were also able to identify ways to reduce the value of their estate over time, and minimise the future IHT liability while ensuring they retained enough assets to fund future care needs.”

Talk to Graham Lee