Press releases

Legal & General Home Finance announce return to aspirational spending for Lifetime Mortgage Customers

Equity release drawdowns for holidays and travel almost tripled in data from the first two months of 2022, compared to the same period in 2021, showing optimism as pandemic restrictions eased. With a cost-of-living crisis set to hit homes in 2022, lifetime mortgage customers may change spending habits again.

16 Mar 2022

Full press release

The easing of pandemic restrictions has prompted an increase in lifetime mortgage customers using their property wealth to fund lifestyle-focused spending, according to internal data from Legal & General Home Finance (LGHF).

January and February 2022 data combined shows that the proportion of customers seeking to use lifetime mortgages to fund holidays and travel has doubled in comparison to the same period in 2021 (20% vs 7%), an indication that consumer priorities have shifted in line with lockdown measures. The number of customers using a lifetime mortgage to purchase a car also increased by nearly two thirds (68%) in the first two months of 2022, compared to the same period in 2021, another indicator that customers are increasingly returning to aspirational spending1.

The number of customers using lifetime mortgage solutions for health and medical purposes almost doubled (92%) in the first two months of 2022, compared to January and February 2021. 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 in line with covid restrictions officially lifting. However, spending habits may change again as a result of the cost of living crisis. A study by the Office for National Statistics (ONS), published in February 2022, revealed that 66% of adults surveyed saw their cost-of-living increase, including 87% seeing an increase in household food shop prices and 79% experiencing rising energy bills2.

Craig Brown, CEO, Legal & General Home Finance: “As pressures, such as the pandemic, may have affected finances, 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.”

1. LGHF data analysing Loan Purpose Drawdowns taken in January and February 2020, 2021 and 2022

2. ONS, Energy prices and their effect on households, 01.02.22

Further information

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Claire Byrd

Senior PR Manager

Legal & General Retail

Notes to editors

Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.

Legal & General Retail helps create brighter financial futures for all our customers. The division covers the savings, protection and retirement needs of our c.13 million retail policyholders and workplace members.  

In 2022, we had total individual annuity sales of £954 million, and issued £632 million of Lifetime Mortgages and Retirement Interest Only Mortgages. Our Workplace pension platform served 4.9 million members, while our Protection businesses gave peace of mind to more than 6.3 million UK life insurance, 1.8 million group and 1.5 million US customers, taking in £3.1 billion of gross written premiums.

*at 31 Dec 2022