Equity release could provide a way to unlock property wealth without having to move from your home or make repayments. As a result, it could be a valuable way to boost your retirement income or fund one-off expenses later in life.
The most common form of equity release is known as a lifetime mortgage. The amount you owe, along with any interest accrued, is rolled up and repaid when you die or move into long-term care.
You can choose to access a single lump sum through a lifetime mortgage, but another popular option is drawdown. Drawdown allows you to access an initial lump sum and leave the remainder to take at a later date if you need to.
According to the Equity Release Council (6 May 2026), the average amount initially withdrawn by customers using drawdown was £62,633 in the first quarter of 2026. On average, drawdown customers have reserve facilities of £61,307.
One of the main advantages of this approach is that interest is usually only charged on the money you have actually withdrawn, rather than the full amount available to you. This can help reduce the overall cost of borrowing over the long term.
To be eligible for a lifetime mortgage, you must be aged 55 or over and own your home. In some cases, you can use equity release if you still have a mortgage on your property, but you must pay it off with the money you receive. How much you can access will depend on the value of your home, age, and other factors.
A strategy could help you manage equity release drawdown effectively
Although drawdown plans can offer flexibility, they still involve borrowing against your home. That’s why having a clear strategy is important. Here are some tips that could help.
Only withdraw what you need
One of the most effective ways to manage drawdown equity release is to avoid withdrawing more money than necessary. As interest is generally charged only on the funds you release, taking smaller amounts gradually can help keep borrowing costs lower over time.
Before you take additional drawdowns, you might consider if the withdrawal is essential or if there are alternative sources available, such as a savings account.
Review your drawdown plan regularly
Retirement circumstances often change over time. That’s why regular reviews are important.
An annual review with a financial adviser can help assess:
- Remaining drawdown facility
- Interest rates and costs
- Current property value
- Overall retirement income needs.
Regular reviews can also help identify whether additional borrowing is necessary or whether adjustments to spending or other assets may be more appropriate.
Consider the impact on the inheritance you’ll leave behind
One of the biggest concerns many homeowners have about equity release is how it may affect the inheritance they leave behind. As interest compounds over time, the amount owed can increase significantly, potentially reducing the value of the estate passed on to beneficiaries.
Managing drawdown carefully can help minimise this impact.
However, you might also want to consider if you could use equity release to pass on assets during your lifetime. It could allow you to support loved ones when they need it most, rather than leaving an inheritance at a life stage when they might be more financially secure.
Having a conversation with your beneficiaries could help ensure you’re on the same page and identify ways you might support them now or in the future.
The drawbacks of using equity release
Whether you opt for a lump sum or drawdown, there are drawbacks to consider before choosing equity release.
As you typically don’t make interest repayments when using equity release, the debt can compound. As a result, the total debt could be much higher than the initial amount you borrowed when it’s repaid.
In addition, if you receive means-tested benefits, accessing wealth through equity release could affect your eligibility.
Find out more about equity release
If you have any questions about equity release and whether it could be an option for you, please get in touch.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Equity release will reduce the value of your estate and can affect your eligibility for means-tested benefits.
A lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration.
