News Review: Equity Release


Market on the up


Have your cake...


... and eat it


5 year tracker fixed, rates starting at: /


2.29% 2 year tracker - followed by


3.49% 3 year fixed rate


Standard, offset and incentive products, 75% and 85% LTV, product fees vary


Details correct at time of going to press


by


Andrea Rozario, director general of SHIP


After a slightly gloomier than usual monthly review, I am glad to be able to share some slightly more positive news. The third quarter of this year saw the equity release market increase in value by 12%, from


£184.9m (Q2 2011) to £206.2m (Q3 2011). The number of equity release customers also grew by over 10% from 3,710 (Q2) to 4,148 (Q3). Some 88% of this business was carried out through intermediaries and 12% directly from providers to consumers. For both channels it is important that consumers are assisted throughout the process and have an opportunity to discuss what will be big decision for them, given both the fi nancial and emotional value of their home.


Look under ‘trackers’ on sourcing systems


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“The series of stock market falls we have witnessed over the past months have prompted over-50s to look to other sources for a retirement income”


Growth This growth of the market could well be down to the fact that people are becoming more aware of equity release as a way of paying for care. Equally, research from LV= suggests that the series of stock market falls we have witnessed over the past months have prompted over-50s to look to other sources for a retirement income. Their research suggests that over the past year the number of over- 50s who are planning to release the equity from their homes has increased from 1.5m in 2010 to 2m (2011). The Pension Protection Fund released fi gures showing that as of September the total defi cit of its member schemes has reached £196.4bn – a growth of £80bn in just four weeks. It is little wonder that those over- 55 year old workers who are approaching retirement feel the need to pursue alternative sources of retirement funding. As we draw to the end of


another year and people begin to look back over 2011, we at SHIP have our own milestone coming up – SHIP’s 20th Anniversary. We are extremely proud of the work that has taken place across the industry to raise awareness of equity release as a retirement planning tool, while at the same time safeguarding consumers. Our third quarter market fi gures have shown that there is an appetite amongst over-55s for products and information, and so we must continue to make sure that these are readily available.


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