Broker: LV= Adviser Survey Reveals Equity Release is Becoming the Norm

As governments of all political hues seem keen to bounce the State pension/retirement age further down the line, to aged 70 or beyond perhaps, there’s no doubt that many property owners will face the prospect of selling a portion of the family home to boost a meagre pension, or part-time work. So will cashing in the value of your bricks and mortar asset become the norm? LV= has conducted a survey to find out;
The majority of advisers (61%) believe it is likely or more likely equity release will become a mainstream product within five to 10 years.
A study commissioned by LV= into advisers’ attitudes towards equity release has found that it has been growing steadily in popularity.
In 2018, LV= saw a 77% rise in sales and the overall equity release market was worth £3.9bn.
Advisers said the most common reason clients took out equity release was to supplement their retirement income (63%), provide financial support for loved ones (32%), home improvements (26%) and pay-off debt (25%).
Barriers to advising on equity release
Despite the rise of equity release, more than two-thirds of advisers (70%) encounter barriers when advising more clients to take out an equity release mortgage. The biggest barrier is deciding whether equity release is suited to their clients’ needs, followed by having to explain the complexity of the product.
Misconceptions over equity release

Some consumers also misunderstand equity release.  Nearly half of advisers (48%) had clients who think they will end up owing more than their home is worth, and a similar number (46%) say clients are often worried that equity release will leave them unable to pass their house on to their family.

More than half (55%) are worried about how equity release will impact the future ownership of their home, while one in three (32%) are concerned that it will lead to them taking on more debt.

Andrew Gilbert, Director of Proposition, Savings & Retirement at LV=, said:

“Equity release is increasingly being seen as a mainstream option in retirement – and rightly so. The Government last year backed a Select Committee recommendation that the new Money and Pensions Service sign-posted retirees to consider home finance options including equity release as part of a broader retirement planning strategy.

“I believe that it’s our job to equip advisers with the knowledge and products they need to provide their clients with the right choices to support their retirement.

“Our findings highlighted that only a quarter (25%) of advisers felt most informed about equity release – this is compared against 91% for pensions and 74% for annuities.

“The Equity Release Council also plays an important role, providing a wealth of online materials including the Adviser Guide to Equity Release. The resources are out there for advisers who want to make the most of this increasingly mainstream retirement planning option.”

 

About alastair walker (3435 Articles)
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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