2020 has been a year of tremendous economic uncertainty in the UK. The arrival of the novel coronavirus has led to repeated lockdowns, which in turn has lead to a sharp rise in unemployment. Among the many consequences of this has been that older people are looking to shore up their finances through equity release.

According to data from Key Equity Release, around two fifths (41%) of those releasing equity are doing so in order to pay off their debts. In Yorkshire, this rises to 49%. This makes the county the leader for the entire country, beating Wales and London into second place, on 47%. At the other end of the spectrum sits the North East, where just 29% of equity-release proceeds go toward paying off debt.

Broken down, this 49% comes to 67% mortgages, 13% credit card debts, 9% loans, and 1% overdrafts – proportions which sit close to the national average. It’s unclear what combination of factors contribute to Yorkshire’s status as the number-one place for equity-driven debt-repayment. What is clear is that, in the face of economic uncertainty, this means of repaying debt has become more popular than ever before.

The number of plans taken out across the country has slumped markedly over the past year, as you might expect. 10,671 plans were taken out in Q3, a fall from 11,772 the previous year. This fall was greater, as you might expect, in Q2 – when the number of plans sat at just 8,374.

Despite the fall, the actual value of the plans actually remained relatively static, at £884 million, compared with £887 million. This is because the average amount released per plan has risen from £75,300 to £82,827.

Will Hale is the CEO at Key. He is quick to point out that, while most people want to reach retirement without any debt to worry about, not everyone has the luxury of being able to do so. “especially those who have taken out interest-only mortgages and now often face finding a substantial lump sum to repay the balance. In H1, over £500 million worth of borrowing was repaid using housing equity – allowing people to retire with confidence, without the burden of needing to make regular monthly payments or facing the prospect of having to sell their home.”

Among the more obvious changes for the industry in 2020 has been a shift toward technological solutions, driven by the need to maintain strict social distancing. Hale points out that: “As an industry, the pandemic forced us to re-evaluate our approach to serving customers and truly embrace technology. Video conferencing, digital signatures and faster processing will benefit our current and future customers.”