Retirement is a great opportunity to revamp your living space and make some home improvements. Whether you’re interested in building an extension, doing up the bathroom or adding solar panels, home renovations can modernise your home and increase its value.

That said, they can often be costly. So we’ve put together a guide covering some options to fund these renovations.

Set a budget 

Before getting started, you’ll need to understand what your budget is. This will allow you to set expectations, control the process, and consider how you can pay for the changes you’re making to your home. 

To draft a budget, you’ll want to know how much you’re likely to pay for the renovations you want to make. It’s best to get quotes from a few sources before deciding who to go with, and to get a good idea of how much the work will cost.

You might also want to consider whether you will see a return on this investment, if you choose to sell your home in the future. An estate agent can do this for you; or you can find a rough estimate of your property’s value – based on others in your area – on a property website.

Remember: while building work can be disruptive, renovations are an investment and can add significant value to your home.

How can I get the money for my home improvements?

There are several lending options to choose from, depending on the amount of money you want to borrow. Here we look at how you can bring your renovation plans to life through government grants, personal loans or equity release for home improvements.

Accessing smaller amounts of money

Using your savings or pension 

The easiest way to fund a home improvement project, is to use cash you already have access to. This is not only the easiest method – it’s the safest, too. Although you should make sure you still have enough to enjoy the retirement you had this money set aside for, and don’t leave yourself short in later life.

Are you eligible to take your pension? If you are, you might think about using some of your 25% tax-free lump sum to fund your home improvements. There are several ways to do this and still provide a retirement income from your pension savings.

While pensions are typically reserved for everyday living in later life, they can be used to bolster the value of your home.

Personal loans

Unlike a lifetime mortgage, a personal loan is a way of borrowing that isn’t secured against your home. Instead, it’s a flexible amount you borrow from the bank, with a short to medium-term repayment window. It’s more likely to be suitable for lower-value home improvements, as your loan repayments are typically a fixed amount every month over a shorter period, so it may be easier for you to budget your money, but interest rates are often high.

That said, if you’re looking to make home improvements sooner rather than later, this could be a useful option.


How to budget for bigger projects

Release tax-free cash from your home with a lifetime mortgage  

If you have ambitious plans for your renovations, you might require a bigger budget and be looking for ways to borrow larger amounts of money. A lifetime mortgage could be one way to fund your project, without having to make monthly repayments. One of our Retirementors, Evadne, took out a lifetime mortgage to help her son onto the property ladder, but saved some of the money to pay for her own home improvements, and is now enjoying a newly decorated lounge and a new boiler. Listen to Evadne share her story in this video interview.

If you’re a UK homeowner over the age of 55, you may be able to release equity from your home. A lifetime mortgage is a loan secured against your house, and the money released is completely tax-free. It can be taken as a lump sum or a series of smaller amounts, which is ideal to help you manage your home renovation budget. You won’t have to go through any credit checks, either; the amount you borrow is based on your age and the value of your property. Do bear in mind, though, that this may affect your entitlement to means-tested benefits, and there may be cheaper ways for you to borrow money. You can only take out a lifetime mortgage through a financial adviser, who will be able to help you decide if it’s the right option for you and your renovation plans.

Find out how much you can release, with our equity release calculator.  

Remortgaging your home

Remortgaging your property is another way of freeing capital from your home to spend on a home improvement project. You can go with your existing provider, or shop around for a better deal, so don’t be afraid to look elsewhere. It can take several weeks though, and could include exit fees if you move to another lender, so make sure you factor this into your plans.

Make your home greener with Government grants 

If you’re looking to make your home greener and more sustainable, why not consider researching a home energy grant?

Depending on the type of work, you may be eligible for local and national grants to help pay for things like loft insulation and solar panel installation. There are several options available, with the aim of making your home more energy-efficient and reducing energy bills.

Boiler grants

If your boiler is more than ten years old, you may be able to qualify for a new one. The free boiler scheme can save you the cost of new boiler, plus you could save up to £315 a year on energy bills.   


If your home was built between 1920 and 1990, there may be gaps between the external and internal walls. Cavity wall insulation between the gaps help to keep the house warmer in cold winter months. This could save a three-bedroom house up to £280 per year.

Did you know that a quarter of the heat from your home escapes from the roof? Loft insulation is another energy-efficiency grant option, which can save you between £135 and £250 annually

Visit the Simple Energy Advice website to see if you’re eligible.


Managing your home improvement budget

Whether you’re making small changes around the house or have ambitious renovation plans, your project shouldn’t put you into unmanageable debt that you can’t afford. Whether you lean on your pension, release equity from your home with a lifetime mortgage or go a different route entirely, there are pros and cons to carefully consider before choosing how to fund your home improvements.

But it’s worth remembering that homes are an excellent asset, and that renovations are an investment. Once the research has been done, and the work has been completed, you’re likely to net a profit from your efforts.

Not sure where to begin? Our article on home renovations is filled with ideas on how you can increase your property’s value by as much as 20%, and shares tips on DIY jobs you can start right away. 

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