Recent research by LV found that 98 per cent of Independent Financial advisers believe the equity release market will grow substantially to plug the shortfall in pensions and meet the needs of the UK’s aging population.
A further 30 per cent said equity release will surge as growing numbers of people need to pay off debt in retirement, while just 9 per cent of IFA's said making home improvements would drive demand. Equity release is most commonly used by pensioners as a way to make home improvements or pay for one-off luxuries, such as holidays, while relatively few actually use it as retirement income.
The findings therefore suggest a major shift in the way equity release will be used in the future.
As experience Independent Financial Advisors of Bishop’s Stortford Enable know that the current factors of depleted pension pots, low returns on savings, poor annuity rates and unpaid mortgage debt meant high property prices were often the biggest asset for many people nearing retirement.
As time goes on more and more people will realise they must use their housing wealth.
Lorreine Kennedy, IFA for Hertfordshire-based CareMatters, said: “The equity release market is definitely an area of growth. I am horrified at the number of people I see in their 70s who still have mortgages or interest-only mortgages.
At Enable we believe you should think through any equity release very carefully and make sure it is part of a bigger plan, our IFA’s are able to advise.
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